Annual
Report 2024
Annual
Report 2024
This report is part of our suite of reporting for the 2024
financial year. You can find more information about our
performance in our Full Year Results Investor Presentation
and Sustainability Report.
Our cover features Daryl and Janye. Our Geelong team
have been sponsoring the City of Geelong Bowls Club
this year as part of their commitment towards supporting
health and wellbeing activities within their local community.
Contents
Medibank Group – our story
1
2024 highlights
3
Chair’s message
4
CEO’s message
6
Delivering value to stakeholders through our strategy
8
Deliver leading experiences
10
Differentiate our insurance business
14
Expand in health
18
Sustainability at Medibank
22
Operating and financial review
23
Directors
31
Executive leadership team
34
Corporate governance statement
36
Risk management
47
Directors’ report
52
Remuneration report
55
Financial report
76
Consolidated statement of comprehensive income
77
Consolidated statement of financial position
78
Consolidated statement of changes in equity
79
Consolidated statement of cash flows
80
Notes to the consolidated financial statements
81
Consolidated entity disclosure statement
118
Directors’ declaration
120
Auditor’s independence declaration
121
Independent auditor’s report
122
Shareholder information
128
Financial calendar
129
Corporate directory
129
Unless otherwise stated, references to a year are to the financial year ending 30 June in that year. References to COVID are to
COVID-19. References to Net Zero, Net Zero strategy and Net Zero pathway are based on business-as-usual operations of Medibank
Private Limited and its wholly owned subsidiaries in 2022, and do not include Myhealth Medical Group or our investment portfolio.
Employee data referenced in pages 3 to 22 only relates to employees of Medibank Private Limited or its wholly owned subsidiaries
2024
Full year results
Sustainability
Report 2024
Environmental
health
Customer
health
Employee
health
Community
health
Governance
Medibank Group – our story
We’re committed to delivering the best health and wellbeing experience for Australia.
From our beginnings as a health insurer, we’ve grown to a health company supporting
around 4.2 million customers and delivering more than 4 million health interactions this year.
We’re focused on helping people live better, healthier lives by giving everyone greater choice, better access and
more value from the health system. We’re working with innovators in health, including health professionals, hospitals
and governments to develop innovative approaches to care, to expand health prevention programs and personalise
health products and services. We’re accelerating the health transition Australia needs to ensure quality healthcare
remains accessible and affordable for everyone.
Our
businesses
Our health
investments
Sustainability
focus areas
Supports the health and wellbeing of
customers with a range of personalised
health programs, services and products
in addition to health insurance
Offers straightforward health
insurance, focused on cutting
out the complexity and making
things simple and affordable
Delivers innovative healthcare
at scale across Australia through
homecare, virtual health,
hospital and primary care
Primary care
Myhealth
Medical Group
Medinet Australia
Homecare
Calvary Amplar Health
Joint Venture
Customer
obsessed
Brilliance
together
Show heart
Break
boundaries
Values
Purpose
Better Health for Better Lives
Vision
The best health and wellbeing for Australia
Short stay hospitals and no gap hospitals
The Orthopaedic Institute at Macquarie University Hospital
East Sydney Private Hospital
Integrated Mental Health (iMH) hospitals
– Sydney & Canberra, Brisbane (opens late 2024)
Adeney Private Hospital (under construction)
Diversified insurance – Travel, pet, life, home and car insurance that
deliver more value for our customers and support their quality of life
Annual Report 2024 1
“ We know our customers and
the broader community want
healthcare done differently”
David Koczkar, CEO
Accelerating
the health
transition
2 Medibank
46.0 (+5.9)
46.4 (+3.7)
customer advocacy
(average Service NPS)
Medibank
ahm
2024 highlights
All data is presented on a statutory basis as at 30 June 2024. Some figures are subject to rounding.
Customer
4m+
primary care health
interactions through
Amplar Health and
Myhealth
$3.3m+
community
investment
3,568
employees
Healthcare
People and
community
46%
Medibank policyholders
engaged with our health
and wellbeing services
Financial
fully franked
9.4 cps
final ordinary dividend
193k
hospital bed days
saved through
prevention and
homecare programs
$692.3m (+6.3%)
Health Insurance
operating profit
$60.4m (+36.7%)
Medibank Health
segment profit
$182.2m (+31.5%)
net investment income
$1.46b
total COVID
financial support
849
health professionals
4.2m
total health
insurance
customers
823k (+18%)
Live Better
rewards
participants
$570.4m
(+14.1%)
Group underlying
net profit after tax
7.9⁄ 10
employee
engagement
+14.4k (+0.7%)
net resident
policyholder growth
+69.0k (+25.1%)
net non-resident
policy unit growth
$6.3b
total claims paid
$52m
further investment
in Myhealth
Medical Group
26.7%
resident policyholder
market share
$10m
in productivity savings
+26
+30
Place to work
Products and service
employee advocacy
(eNPS)
including
Annual Report 2024 3
Chair’s message
Medibank’s performance this year reflects our
ongoing focus on our customers, our investment in
the health transition and our disciplined approach
to growth. We also continue to make substantial
progress towards our vision to deliver the best
health and wellbeing for Australia.
While the industry and Medibank both grew during the year,
we remained deliberate in our response to the competitive
environment and commitment to managing the business
for the long term. This helped drive a 6.3% increase in
Health Insurance operating profit and a strong result in the
Medibank Health business, with segment profit up 36.7%,
including the contribution of our increased investment in
Myhealth.
Our strong capital position continues to provide stability as
well as flexibility for future growth and the Board determined
a fully franked final ordinary dividend of 9.4 cents per share.
This brings the total FY24 fully franked ordinary dividend to
16.6 cents per share, representing an 80.1% payout ratio of
underlying NPAT.
There is much for the team to be proud of this year. They
have worked to deliver more value for customers at a
time when inflation has persisted, and household budgets
continued to feel the pressure of the increasing costs-of-
living. They have continued building customer trust by
further strengthening the foundations and making the
business more resilient. As well, they have looked toward
the longer-term needs of customers and taken important
steps to accelerate the health transition needed to
ensure the future sustainability of the health system.
A key role of the Board is oversight of the strategic direction
of Medibank and this year we undertook a number of
opportunities to assess the implications and opportunities
of current and emerging healthcare trends. We met with
a diverse range of organisations leading change in areas
including large-scale digital prevention programs, care
models for the future and the use of generative artificial
intelligence in healthcare delivery.
We have also continued to connect with teams across the
business. This includes seeing firsthand the virtual hospital
capabilities of My Home Hospital in South Australia,
delivered by our Calvary Amplar Health Joint Venture for
SA Health, meeting with the ahm customer support team
about their new way of working designed to better support
customer needs; as well as with our ventures team that is
working on accelerating our digital health offering.
The Board also undertook a visit to Medibank’s retail store
in the Victorian city of Geelong, which is our first store
to trial a new local service approach where customers
calling or messaging us are supported by team members
who live locally and know the health needs and providers
within the community. Following the success of this trial
for our customers and teams alike, this approach is rolling
out nationally.
We have worked hard to deliver on our environmental, social
and governance commitments. We further accelerated our
Net Zero pathway, commencing the shift of our mobile Amplar
Health team from petrol to hybrid cars. As we look to transition
to 100% renewable energy across our operations by 2025,
64% of our electricity was procured from renewable sources.
Building a more
sustainable
healthcare
system
Mike Wilkins AO
4 Medibank
We have continued embracing diversity and inclusion in
our workplace. To support our Aboriginal and Torres Strait
Islander employees, we enhanced our Cultural leave and
Sorry Business leave, in consultation with our Aboriginal
Employee Network. We were proud to be recognised as
a Top 5 Performer in the Australian Disability Network’s
Access and Inclusion Index 2023.
We also continued to champion gender diversity across
the business. Since 2018 we have published gender pay
gap data, and this year we published our first Gender Pay
Gap Reporting Employer Statement along with 5,000 other
companies. While this report showed our median gender
pay gap is pleasingly below the industry average, it also
highlights opportunities to drive further action and change
to reduce the gap. A Board member change earlier this year
meant for the first time in 15 years, we did miss our stated
objective of 40% women representation on the Board, while
achieving 46% representation among Group and senior
executive roles but we remain committed to the target.
The business has remained resilient, with the team’s
experience at navigating changing economic and market
dynamics showing through. They remain focused on
strengthening relationships with government, industry
stakeholders and our healthcare partners, while evolving
the way we are working to create a healthier and more
engaged workplace that enables our people to deliver
for our customers, our community and our shareholders.
I would like to thank my fellow directors for their contribution
this year and on behalf of the Board, recognise the work
of David Koczkar and the executive team. I extend this
appreciation to everyone at Medibank for their unwavering
commitment to our vision to deliver the best health and
wellbeing for Australia.
“We are working to make a
meaningful impact on the
health and wellbeing of our
community and our planet ”
Sustainability
Report 2024
“The business has remained
resilient, with the team’s
experience at navigating
changing economic
and market dynamics
showing through”
Annual Report 2024 5
CEO's message
As many customers felt the pressure of rising
cost-of-living on their household budgets, we
remained focused on providing our customers
with more value and greater support in their
health and wellbeing.
We worked hard to keep our premium increases as low
as we could, with this year’s average increase below
inflation and wage growth.
Our customers saved over $23 million using our Members’
Choice Advantage network and our Live Better rewards
program delivered more than $25 million in rewards –
including $8 million in cover rewards like premium top ups.
We made it easier for people to get health advice by
extending access to our 24/7 nurse and mental health
support lines to an additional 700,000 customers. In
response to customers’ increased concerns about out-of-
pocket costs, we expanded the procedures covered by
our no gap program which is now available at 35 hospitals.
We’ve seen a 38% increase in the number of customers
going through the program this year and will be adding
new services to this program in FY25.
We stuck by our promise to not profit from the pandemic.
In May we announced an additional $305 million in COVID
give back to our customers, bringing our total customer
support to a record $1.46 billion. We also continued to
manage our own costs and delivered around $10 million
in productivity savings this year, which is important given
the economic environment.
This year we took a big step as a health company. We
increased our investment in the Myhealth Medical Group,
bringing it together with our existing Amplar Health
services to establish what is now one of Australia’s largest
multi-disciplinary primary care networks. This network
delivered more than 4 million health interactions to people
across the country – in clinics, virtually and in homes.
Almost half of our Medibank policyholders are now
engaging with our health and wellbeing services and this
year we introduced new self-paced digital prevention
programs to our Live Better rewards program. We entered
a new partnership with leading healthcare technology
provider Amwell to develop prevention programs that can
reach a much larger number of people and are planning
to launch the first of these – a lifestyle management
program to promote wellness and prevent chronic disease
– later this year.
We know our customers and the broader community want
healthcare done differently and we have continued to
invest in prevention and primary care, virtual health and
homecare to deliver greater value, choice and control.
This is helping accelerate the health transition underway in
Australia – a shift from overnight stays in expensive acute
care hospitals to virtual, short stay and homecare, from
treatment to prevention, and from generalised care to
personalised health.
Our health system needs this innovation. If we don’t act,
the government will need to spend nearly 50% more on
health as a proportion of GDP in 40 years’ time, with hospital
spending the fastest growing part.
The past few years have been challenging for all parts of the
health sector, including hospitals. In recent times, inflation
has been driving up costs for hospitals and COVID waves
have impacted staffing and operational levels of hospitals.
David Koczkar
Delivering
greater
value for our
customers
6 Medibank
We want the private hospital sector to be strong. And we
recognise the important role hospitals play in supporting
our customers – which is why we continue to support
our hospital partners and fund them through the health
transition. Over the last 2 years our one-off financial support
for hospitals has reached a substantial $63 million – in
addition to higher indexation in our hospital agreements
and additional incentives to accelerate the health transition.
We have been changing the way we work too, to better
support our people to lead through this health transition.
We continued to simplify our processes and build more
autonomous teams, while enabling our people to be at
their best, both personally and professionally.
All of this work is designed to create better experiences for
our customers and this year we achieved our best advocacy
scores in the last 4 years for both Medibank and ahm.
Change in health is never easy. But we are at the forefront
of this transition, working alongside doctors and health
professionals and investing in care models for the future.
I’d like to thank Mike Wilkins and the Board for their support
during the year and recognise the work of our incredible
team of people – who are strongly committed to our vision
and to driving the change needed to keep Australia’s
health system one of the best in the world.
Outlook
Customer growth:
expect solid policy
unit growth to
continue in FY25
Non-resident
health insurance
Customer promise:
any permanent net
claims savings due
to COVID-19 will be
returned to customers
Customer give back
program: expect
the finalisation of
our customer give
back program to be
announced in FY25
Customer
value
Industry growth: anticipate moderating
industry growth in FY25 relative to FY24
Customer growth: we will remain
disciplined as we aim to grow in line
with market during FY25 (including
volume growth in the Medibank brand),
and aim to grow market share in FY26
Claims: expected claims per policy
unit growth of around 2.7% in FY25
Management expenses: targeting
$10m of productivity savings in FY25
Resident health
insurance
Organic growth:
targeting average
organic profit growth
≥15% per annum between
FY24 and FY26 plus a
12-month contribution
from Myhealth in FY25
Inorganic growth:
aim to invest between
$150m to $250m through
further M&A between
FY24 and FY26
Medibank
Health
“This year we took
a big step as a
health company”
Annual Report 2024 7
Accelerate growth in prevention,
primary and virtual care and
other care models for the future
Scale and connect our existing
health businesses
Deliver more health services to
Medibank and ahm customers
Accelerate Australia’s health
transition
Better Health for Better Lives
Customers
Employees
Community
Shareholders
Health providers
and patients
We’re supporting
our customers’
health and wellbeing,
offering greater
healthcare value,
choice and control
and creating a
more connected
experience
We’re empowering
our people to
achieve their best
through flexible
working, health and
wellbeing support,
with a culture that
celebrates diversity
and inclusion
We’re addressing
some of Australia’s
biggest health
and community
challenges such as
loneliness, mental
health, reconciliation,
climate change, and
diversity and inclusion
We’re delivering
sustainable returns
to our shareholders
while meeting the
expectations of
our customers
and community
by embedding
environmental, social
and governance (ESG)
practices in our strategy
We’re accelerating
the health transition
needed to make our
health system more
equitable, affordable
and accessible, investing
in prevention and
health services, and
working with health
professionals, hospitals
and governments
Expand
in health
Our strategy – growing as a health company
Engaged, purpose-
led culture, attract
and retain talent
Diverse and
inclusive workforce
Support healthy
communities
Ethical and
sustainable
business
Work together to
build a stronger
and more
sustainable
health system
Affordable,
innovative and
personalised
healthcare
Deliver more value, choice and
control for customers
Provide holistic health solutions
to customers including resident,
non-resident and corporate customers
Strengthen our dual brands and
provider networks
Lead change with partners to
deliver affordable healthcare
Differentiate our
insurance business
Create personalised and
connected customer experiences
Empower our people and
reinvent work
Collaborate with our communities
and partners to make a difference
Continue to strengthen trust
and reputation
Deliver leading
experiences
How we’re delivering value through our strategy
The material issues they care most about
Delivering value to stakeholders through our strategy
Our stakeholders
Environmental health and climate change
8 Medibank
“ We have looked
toward the
longer-term needs
of our customers”
Mike Wilkins, Chair
Growing as a
health company
Annual Report 2024 9
Deliver leading experiences
Service
made easy
We simplified how customers can manage
their health and wellbeing, giving our people
more control of how they work to deliver better
customer experiences, and strengthening our
partnerships to build healthier communities.
c. 4.2m
total health insurance
customers
as at 30 June 2024
10 Medibank
> Create personalised and connected customer experiences
> Empower our people and reinvent work
> Collaborate with our communities to make a difference
> Continue to strengthen trust and reputation
Personalised customer experiences
We strive to create brilliant experiences for our customers
– whether they visit us in store or at one of our mobile vans,
or call or message us online. And we’re proud to see this
reflected by increasing customer advocacy – achieving
our best Service NPS result over the last 4 years for both
Medibank and ahm.
Our customers are experiencing the benefits as we reinvent
the way we work – like getting to the right expert faster,
resolving queries through self-service or connecting with
local team members who know their area. We’re being smart
in how our teams are using artificial intelligence (AI) to help
our customers – it's now assisting in almost 50% of support
calls from our customers.
We’ve given our people more power to deliver personal
and localised services and health support. This year, we
continued a trial for our Medibank customers in South
Australia and the Geelong and Gold Coast regions. Our
customers in those locations are served by team members
who live locally and know the health needs and local health
providers for those communities, and can access our
health experts in store. This is leading to a better customer
experience, and our people are more engaged, with a
national rollout of the program to be completed in FY25.
We also tapped into feedback from our people to inform
store redesigns. The layout and state-of-the-art technology
in these stores are helping to create a unique experience
for customers aligned to our 2030 vision to deliver the best
health and wellbeing for Australia. The new designs have
increased the number of complimentary health checks
and health conversations offered in store.
Our fleet of mobile stores on wheels – GalliVANt, SulliVAN
and VANgo – continued to play an important role in
supporting regional and rural communities.
The vans are equipped with machines which enable
complimentary health checks and use of these machines
doubled year on year to 2,500. We’re continuing to offer these
checks to more communities across the country in FY25 so
more people can access information about their health.
A more seamless digital experience
As part of enhancing our digital channels and self-service
functionality, we redesigned the ahm app to create a more
straightforward, intuitive, and easy to use experience.
Introducing a friendly chat bot and in-app messaging has
made it easier for customers to get the information they
need, when they need it.
The number of customers using the My Medibank app
continued to grow and the integration of Live Better
rewards within the app supported increased engagement
and participation in the program.
With over 40% of all service enquiries now being resolved
through messaging, it is clear customers value the
convenience offered by this channel. Following the launch
of in-app messaging and live chat via our website for
Medibank and ahm Overseas Student Health Cover (OSHC)
customers, we have supported up to 2,000 conversations
a week on these channels.
To continue to help protect our customers’ data, we
enhanced security features across our Medibank, ahm and
OSHC apps including added authentication requirements
when people message us or call our contact centres. We
updated our Privacy Policy including making improvements
to the user experience and to give customers more clarity
about how we collect, store and use their data and launched
a new customer security and privacy hub. We also enhanced
protections for vulnerable Medibank and ahm customers
with the launch of a proactive speech analytics system.
46.0 (+5.9) 46.4 (+3.7)
customer advocacy
(average Service NPS)
Medibank
ahm
50%
of support calls from
customers assisted with AI
5,000
people helped by
our Medibank vans
60%
of complaints resolved
within first contact
(up from 30% in FY23)
Our goals
Deliver leading experiences
FY23-FY25 milestone
achievements – page 30
Annual Report 2024 11
Deliver leading experiences
Creating the healthiest workplace in Australia
In line with our purpose of Better Health for Better Lives,
we’re working to create the healthiest workplace in Australia.
This starts with reinventing the way we work, enabling our
people to do things differently so they can focus on what
really matters to our customers, patients and community.
We’re evolving our work practices to drive highly aligned and
autonomous teams and supporting our people as individuals,
empowered to do their best through our robust diversity
and inclusion strategies. And we know it’s working, with
our employee engagement scores among our highest ever.
Pleasingly, our 2023 employer statement for gender pay gap
reporting disclosed our median gender pay gap is below our
industry average for both Medibank and Amplar Health.
We were recognised as a Top 5 Performer in the Australian
Disability Network’s Access and Inclusion Index 2023 and
awarded Best in Class Employee Experience. As well, we
achieved Disability Confident Recruiter status for 2024.
We enhanced our Cultural leave and Sorry Business leave
policies to support Aboriginal and Torres Strait Islander
employees in consultation with our Aboriginal Employee
Network. We also introduced gender affirmation leave to
provide support for trans and gender-diverse employees
and continue to offer unlimited paid leave to our people
who are experiencing domestic family and sexual violence.
We partnered with Macquarie University to develop a
4-day work week trial, based on the 100:80:100 model.
The 250 team members who have participated in the
6-month experiment maintain 100% of their pay, reduce
their working hours to 80%, while maintaining 100%
productivity. The mid-point results are promising; participant
health and wellbeing, performance and productivity have
remained stable, engagement has increased and turnover
and absenteeism reduced in frontline teams.
To better support the health of our people, we introduced
free virtual GP consultations for all our teams – more than
500 of which have been conducted since the program
launched in March. We also offered free access to our
new Healthy Living Extras product, and our employee
health and wellbeing hub gives our people a range of
tools to manage their physical, mental and financial health.
By enabling our people to be at their best, personally and
professionally, we’re better positioning our organisation
to make a real difference to our health system for our
customers and community, helping to accelerate the
health transition Australia needs.
Read more about our work.reinvented program
Sustainability Report 2024 – page 29
46%
of senior leadership
roles held by women
18th worldwide
7 th in Australia
Equileap Global
Gender Equality Index
7.9/10
employee
engagement
85%
employees have
work/life flexibility
12 Medibank
$4.4m
spent with Aboriginal
and Torres Strait Islander
businesses in FY24
$970k
invested in 15 active
health research projects
Building healthier communities
We want everyone to live their best life, so we’re focused
on making a positive contribution in our community.
We’ve partnered with parkrun Australia since 2016 to bring
local communities together to get active on a Saturday
morning. This year Australia became the second country
globally to mark 1 million parkrun participants, and we
integrated parkrun into our Live Better rewards program
so customers can now earn points for taking part.
Through the Medibank Better Health Foundation we
continued prioritising research in areas of high health
need in Australia. This year we partnered with 11
organisations to support 15 active projects in areas
including care models for the future, women’s health,
Indigenous health equity and prevention.
As part of our 10-year commitment to helping address
loneliness, we undertook our 4th Loneliness Index survey
to track the prevalence and impact of loneliness across
Australia. We also worked on our 3rd series of the We Are
Lonely podcast to raise awareness of young people’s
experiences of loneliness and strategies to address it.
Read more about our commitment to address loneliness
Sustainability Report 2024 – page 56
We have continued listening and learning from Aboriginal
and Torres Strait Islander individuals, communities and
organisations on matters that concern their communities.
The referendum result has not stopped us from doing this or
changed our commitment to reconciliation and we remain
focused on supporting the health and wellbeing of First
Nations people and the wider Australian community. During
the year we worked with the Australian Indigenous Doctors’
Association to pilot a cultural safety in health workshop
for our Amplar Health clinical leaders and supported them
to take a group of Indigenous medical students back on
Country in the Torres Strait.
As part of our Net Zero pathway, our mobile Amplar Health
team is transitioning from petrol to hybrid vehicles and as
of the end of this financial year, 64% of our electricity is
being procured from renewable sources. We moved into
our new Melbourne office in July 2024. The 6 Star GreenStar
building is designed to maximise accessibility and has
improved efficiencies for electricity and refrigerants, with
a commitment to achieving a specific NABERS energy
rating through formal certification.
We also commissioned external researchers to undertake a
Life Cycle Analysis of telehealth and in-hospital treatment
pathways for our Better Knee, Better Me program in both
rural and urban settings. The findings show delivery of this
program via virtual health had lower environmental impacts
compared to the traditional in-hospital delivery, and will
help inform our future developments of health programs.
Read more about our Net Zero approach
Sustainability Report 2024 – page 70
388k (+29%)
people took part in
parkrun Australia
in FY24
$3.3m+
community investment
64%
electricity procured through
renewable sources as at 30 June 2024
Annual Report 2024 13
Differentiate our insurance business
Customers are increasingly seeking more value
and shopping around to get it, which is why we’ve
been finding more ways to deliver more everyday
value through our Medibank and ahm brands.
Value that
delivers
$23m+
out-of-pockets saved
through Members’
Choice Advantage
14 Medibank
> Deliver more value, choice and control for customers
> Provide holistic health solutions to customers including resident, non-resident and corporate customers
> Strengthen our dual brands and provider networks
> Lead change with partners to deliver affordable healthcare
More value for customers
We know cost-of-living pressures continue impacting
household budgets. Many of our customers are making
deliberate spending cuts, but health cover remains high on
their priority list. So we’ve worked to enhance our products
and services, grown our provider and partner network, and
given our customer service teams more ways and greater
autonomy to support each customer’s health needs.
Value starts with premiums, which is why we worked hard to
keep premium increases as low as we could despite rising
health costs in the private system. Our FY24 give back
commitment of $305 million, comprising a customer cash
give back and ahm extras limit rollover, brings our total
COVID financial support package to a record $1.46 billion.
This package, which is part of our commitment to not
profit from the pandemic, is the largest of any health
insurer in Australia to date.
We remained focused on our own costs, delivering around
$10 million in productivity savings this year – with a further
$10 million targeted for FY25.
Products and services that offer more
We strive to deliver value for customers at every stage of
life and whatever their circumstances.
For younger people looking for their own health cover for
the first time, Medibank launched Healthy Living Extras.
This product starts at $3.45 a week and covers 1 annual
dental check-up and clean, flu vaccination, unlimited
emergency ambulance and access to our 24/7 mental
health and nurse support services.
We extended access to our 24/7 nurse and mental health
support services to all Medibank health insurance customers.
Around 700,000 additional customers, including those
with extras and ambulance cover, now have this support
any time of the day or night. In addition, we made the 24/7
Nurse service available via chat through the My Medibank
app with many younger customers choosing this option.
Medibank delivered more health prevention and savings
through its latest range of silver and gold hospital cover
products, including no excess for no gap surgeries (saving our
customers an average $492 per procedure), and payments
and benefits for private emergency department admissions.
These are one of the only products on the market that ensure
customers going to hospital for a no gap procedure have no
out-of-pocket costs, saving these customers who undergo
joint surgery around $2,400 on average.
As well, ahm redesigned its product range to shift some
high-cost treatments like pain management with devices
and insulin pumps to higher-level products. Customers can
make the best choice for their health and wellbeing and only
pay for what they are likely to need, ensuring our entry and
mid-level products remain affordable.
We encouraged preventative dental care and helped our
customers with cost-of-living pressures by offering Medibank
customers with extras cover $50 towards out-of-pocket
costs at Members’ Choice Advantage dental practices as
a Live Better reward.
We continued to support customers with insurance options
beyond their health cover, including travel, life, car, home and
pet insurance, with a record number of Medibank and ahm
customers taking up additional insurance options this year.
With affordability in focus, we launched new life insurance
and income protection products with increased annual limits
and benefits. We also enhanced our pet insurance range
and upgraded the cover of all existing customers.
Our goals
Differentiate our insurance business
FY23-FY25 milestone
achievements – page 30
$305m
in FY24 COVID financial support
c. $1.46b
total COVID financial support
$6.3b
total claims paid
Annual Report 2024 15
Stronger partnerships driving greater value
We’re delivering more for our customers thanks to our
strong relationships with hospitals, health providers and
Live Better rewards partners. As we champion contemporary
models of care that align with international best practice,
we are providing more of what our customers want and
reshaping healthcare in Australia.
We have the largest no gap network in Australia, as we’ve
expanded the procedures covered as well as the network
of acute and day hospitals where it is available. We’ve
saved more than 7,000 customers over $3 million to date.
A highlight this year was introducing ACL (anterior
cruciate ligament) surgeries to the program with significant
out-of-pocket savings for customers of around $1,700.
Our Members’ Choice Advantage network delivered more
than $23 million in savings to customers seeking dental,
physiotherapy, optical, chiropractic, podiatry, acupuncture
and remedial massage services and this year, we worked
to grow our network of regional providers.
We continued to invest in our customers’ health and
wellbeing through our Live Better rewards program, with
customers able to earn up to $400 in rewards points each
year by taking simple healthy actions and participating
in challenges. Our Live Better members have redeemed
over $25 million in value including more than $8 million
of health cover rewards such as savings on premiums
or limit top ups. We also extended the program to our
younger customers this year so 16 and 17-year-olds can
earn their own points to put towards redeeming rewards.
We work closely with our private hospital network to provide
choice, value and control for our customers and to support
the ongoing sustainability of private healthcare. Our new
partnership approach better aligns incentives, encourages
innovation in patient care and experience, and supports
care models for the future to reduce unnecessary costs.
These new arrangements now cover 75% of the private
hospital episodes experienced by our customers.
Find out how our health partnerships deliver
more value for our customers
Sustainability Report 2024 – page 21
Differentiate our insurance business
Services supported
1.2m+
hospital
admissions
28.1m+
extras services
583k+
surgical
procedures
$1,900
average out-of-pocket
cost savings
35 hospitals
38%
growth in procedures
No gap joint
replacement
program
16 Medibank
+69.0k (+25.1%)
non-resident
policy unit growth
100%
increase in virtual
GP corporate
consultations
870k
employees from
corporate partnerships
engaged in health
and wellbeing
Supporting our international and corporate
customers
Despite the reduction in visa grants this year, more
international students joined us, attracted by the
affordability, value and enhanced health and wellbeing
support we offer through our products and services and
we continued to win more corporate accounts.
We doubled the number of virtual GP consultations for
international and corporate customers, while demand for
our 24/7 Student Health Support Line increased by 60%.
We opened our Live Better rewards program to corporates
this year who can earn up to $700 in rewards and saw a 66%
increase in the number of overseas students accessing our
Student Rewards program. We continued to build upon our
university partnerships, working together on health research
projects and professional development opportunities.
Helping build a more equitable health system
We are working to drive change in areas of the health
system and in health policy where there is an opportunity
to improve value, choice and control for people and build
a more sustainable health system for the future.
We continued to advocate for reforms and engage with
key medical and health associations on how to improve
the health system. Medical device funding reform remains
a high priority as Australians keep paying some of the
highest prices in the world for these devices.
Primary care is the foundation of the health system and GPs
are essential to the health of our community, and this year
we strengthened our commitment to health prevention,
increasing our investment in the Myhealth GP network.
Find more about our Myhealth GP pilot program
Sustainability Report 2024 – page 58
Annual Report 2024 17
Expand in health
Whether our customers want to be better,
or they need to get better, we are there to
support their health and wellbeing.
Healthcare
made easy
823k (+18%)
Live Better rewards
participants
18 Medibank
> Accelerate growth in prevention, primary and virtual care and other care models for the future
> Scale and connect our existing health businesses
> Deliver more health services to Medibank and ahm customers
> Accelerate Australia’s health transition
Helping customers be better
More than 8 out of 10 of our customers want us to
support their health and wellbeing, so we’re investing
more in preventative health to help our customers live
their best lives and to take pressure off the health system.
In addition to our suite of clinician-led prevention programs,
this year we introduced 2 self-paced digital prevention
programs to Live Better rewards, with around 132,000
enrolments across all of these programs. Not only are these
programs helping people to manage their health conditions,
they’re also helping them feel more confident about looking
after their own health and wellbeing.
Our new partnership with leading healthcare technology
company, Amwell, enables us to connect a significantly
larger number of people in Australia with chronic disease
digital prevention programs. These programs can have
a positive impact on the broader health system, and we
expect to launch our Medibank Healthy Lifestyle program
later this year.
To support people transitioning back into their home after
a hospital stay, we launched an After Hospital Home Care
pilot program in May. We also offered personalised health
support to more than 1 in 4 Medibank customers preparing
for or recovering from a hospital stay or treatment through
our Health Concierge program.
We supported more of our corporate customers with health
and wellbeing services, delivering almost 600 customised
programs this year. We partnered with more than 250
organisations to embed wellbeing programs with focuses
such as menopause and loneliness, and conducted large-
scale health events which connected more than 870,000
people with services such as health checks, skin checks
and flu vaccinations.
132k
enrolments in clinician-led
prevention programs
and Live Better digital
prevention programs
46%
of Medibank policyholders
engaging with our health
and wellbeing services
Our goals
303k
virtual health Medibank
customer interactions
delivered by Amplar Health
and partners
1+ in 4
Medibank customers
going to hospital supported
by Health Concierge
Expand in health
ENROL
FY23-FY25 milestone
achievements – page 30
Annual Report 2024 19
Expand in health
Better healthcare options for customers and
the community
We are working with a range of partners to accelerate the
take up of care models for the future with our investments in
homecare, short stay hospitals, virtual health and primary
care supporting greater access, value and control for our
customers as well as others in the community.
Our Amplar Health team is delivering around 1,000
homecare visits a day to people across Australia – providing
home hospital, nursing and physiotherapy services. In
July 2024, we opened the Amplar Health Adelaide Hub –
headquarters for the team’s extensive national network of
nurses and allied health practitioners – which is designed
to optimise the delivery of care to patients in their homes.
The team also supported around 1 million virtual health
interactions with our customers and the broader community,
including triage and health support, mental health services
and preventative health programs. Our Myhealth GP
network provided more than 3 million patient consultations
across their 106 clinics.
Mental health support remained a key focus. We opened
our second hospital offering an innovative approach to
mental health care with in-hospital, community and home
care through our iMH (Integrated Mental Health) joint
venture with Aurora Healthcare. A third hospital will open
in Brisbane in late 2024. And in August 2024, we extended
our virtual psychology clinic developed with Myhealth
to all Medibank customers, so they can access timely
and affordable support from registered psychologists.
We have continued supporting Australians with mental
health triage and mental health support services. This
service is also actively used by NSW Ambulance in the
field to triage patients and avoid unnecessary emergency
department presentations.
Read more on our mental health support approach
Sustainability Report 2024 – page 19
In February, The Orthopaedic Institute at Macquarie
University Hospital opened its doors, and East Sydney
Private Hospital expanded, adding 2 state-of-the-art
theatres and 14 new beds. Construction continues on
Adeney Private Hospital in Melbourne – a doctor-led joint
venture that will add 4 operating theatres, a procedure
room, 30 beds, radiology services and a chemotherapy
infusion clinic to the health system in early 2025. Our
investments in each of these hospitals support the short
stay model of care.
In South Australia, My Home Hospital provided hospital
level care to 7,000 public patients in their homes, delivered
by our Calvary Amplar Health Joint Venture for SA Health.
Our Amplar Health team also continued to deliver
community care and aged care support.
40%
of Medibank no gap
joint replacement
patients are having
rehab at home
210k+
homecare visits
supporting
18k patients
19%
increase in calls
to 24/7 Nurse
Phone Service
193k
hospital bed days
saved through
prevention and
homecare programs
20 Medibank
Accelerating the health transition our country needs
The challenges facing our health system can be seen in
the decade-high waiting lists in public hospitals, ongoing
ambulance ramping, delays to see a GP or a specialist,
and a stretched health workforce. This is why we’re
investing in the health transition Australia needs, driving
change by building a more connected healthcare
experience and innovating with care models for the
future that bring together the benefits of homecare,
virtual care and hospital care.
With our increased investment in the Myhealth GP network,
we’ve created one of Australia’s largest multi-disciplinary
primary care networks. From GPs to nurses, psychologists
to physiotherapists and other allied health specialists,
we are delivering care in clinics, in homes and virtually.
This is enabling us to better support the health of millions
of people in Australia and grow our health offerings for
our Medibank and ahm customers.
To improve the health experiences of patients with chronic
conditions such as diabetes and cardiovascular disease,
we’re investing up to $3 million over 3 years to enable
Myhealth GPs to pilot a new program for primary care
for all Australians.
More than 600 patients have already been through
this GP-led program which brings together a multi-
disciplinary team to steer higher risk patients away
from typical chronic disease outcomes, and aligns
with recommendations from the Government’s
Strengthening Medicare Taskforce report.
c. $52m
further investment
in Myhealth
Medical Group
4m+
health interactions
through
Amplar Health
and Myhealth
Annual Report 2024 21
Sustainability at Medibank
Material topics
Our sustainability focus areas
FY24 focus areas
• Short stay and
no gap networks
• Virtual healthcare
and homecare
• Integrated care
models
• Van visits to regional
and rural areas
• Live Better and
preventative health
programs
• Partnerships
with providers
• work.reinvented
• Autonomous and
empowered frontline
teams
• Inclusive recruitment
• On-demand learning
• Health, safety and
wellbeing
• Gender pay gap
• Loneliness
• Medibank Better
Health Foundation
research
• parkrun Australia
• Health equity
and inclusion
• Healthcare
investments
• Myhealth GP network
• Public health
system support
• Life Cycle Analysis of
Better Knee, Better
Me program
• Preparing for
Australian
Sustainability
Reporting Standards
• Progressing Net Zero
commitment
• Environmental
sustainability
embedded into new
Melbourne office
• Greenhouse
gas emission
measurement for
Myhealth GP network
• Corporate and
clinical governance
• Data Protect
program
• IT security
uplift program
• Addressing modern
slavery risks
• Aboriginal and
Torres Strait Islander
procurement
Engaged, purpose-
led culture, attract
and retain talent
Diverse and
inclusive workforce
Support healthy
communities
Work together to
build a stronger and
more sustainable
health system
Environmental
health and
climate change
Ethical and
sustainable
business
Affordable,
innovative and
personalised
healthcare
Customer
health
Employee
health
Community
health
Environmental
health
Governance
Better support our
customers to improve
their health and
wellbeing through
personalised advice
and by delivering
greater value, access,
choice and control
Build an engaged,
inclusive workforce
that is customer
obsessed, values and
purpose driven and
focused on health
and wellbeing
Make a difference in
our community, by
accelerating the health
transition Australia
needs to ensure the
sustainability of our
health system, building
partnerships and
investing in preventative
health and research
Entrench
environmental
sustainability into
our decision-making
Embed ethical and
responsible business
practices throughout
Medibank and our
supply chain
We take a big picture view of how
we impact society and how we can
contribute to a positive future that
is in line with our stakeholders'
expectations.
In support of our Better Health for
Better Lives purpose, our Sustainability
Report 2024 details how we are creating
healthy and inclusive communities
and accelerating the health transition
Australia needs to support accessible
and affordable care, while we reduce
our environmental impact, create the
healthiest workplace and embed
ethical decision-making in all our work.
22 Medibank
1. About Medibank
Medibank Private Limited (Medibank) is a health company
providing health insurance to around 4.2 million people in
Australia as well as health services. Our core business is
Health Insurance, where we underwrite and distribute private
health insurance policies under the Medibank and ahm
brands for resident and non-resident customers. Medibank
Health complements our Health Insurance business by
providing a number of services. Amplar Health supports the
healthcare needs of our core Medibank and ahm customers
and the broader community and Myhealth provides
integrated primary care services with a patient-centred
approach. Our Live Better program supports customers and
the community to make better choices for their health and
wellbeing. We also offer a range of diversified insurance
products such as travel, life, home and pet insurance and
have a number of non-controlled investments supporting
our strategy to provide greater access, choice and flexibility
in healthcare. Additionally, as we maintain assets to satisfy
our regulatory reserves, we generate investment income
from our portfolio of investment assets.
Medibank was founded in 1976 as a private health insurer
owned and operated by the Australian Government.
We have operated on a for-profit basis since 2009.
On 25 November 2014, Medibank was sold by the Australian
Government by way of an initial public offering (IPO) and
listed on the Australian Securities Exchange. As at 30 June
2024, we had 3,220 full-time equivalent (FTE) employees,
including 658 health professionals (excluding employees
in associates and joint ventures).
2. Financial and operating performance
References to “2023”, “2024”, “2025” and “2026” are to
the financial years ended on 30 June 2023, 30 June 2024,
30 June 2025 and 30 June 2026 respectively, unless
otherwise stated. The “Group” refers to the consolidated
entity, consisting of Medibank and its subsidiaries.
2.1 Group summary income statement
Year ended 30 June ($m)
2024
2023
(restated)1
Change
Group revenue from external customers
8,175.8
7,807.0
4.7%
Health Insurance operating profit2
692.3
651.3
6.3%
Medibank Health segment profit
60.4
44.2
36.7%
Segment operating profit
752.7
695.5
8.2%
Corporate overheads
(52.9)
(47.1)
12.3%
Group operating profit
699.8
648.4
7.9%
Net investment income
182.2
138.6
31.5%
Other income/(expenses)
(19.7)
(12.6)
56.3%
Cybercrime costs
(39.8)
(46.4)
(14.2%)
Profit before tax, before movement in COVID-19 reserve
822.5
728.0
13.0%
Movement in COVID-19 reserve (excl. tax)
(110.8)
(290.1)
(61.8%)
Profit before tax
711.7
437.9
62.5%
Income tax expense
(215.3)
(129.3)
66.5%
Non-controlling interests
(3.9)
-
n.m.
NPAT attributable to Medibank shareholders
492.5
308.6
59.6%
Effective tax rate
30.3%
29.5%
80bps
Earnings per share (EPS) (cents)
17.9
11.2
59.6%
Normalisation for investment returns
0.3
(11.5)
(102.6%)
Normalisation for COVID-19 reserve movements
77.6
203.0
(61.8%)
Underlying NPAT3
570.4
500.1
14.1%
Underlying EPS (cents)3
20.7
18.2
14.1%
Dividend per share (cents)
16.6
14.6
13.7%
Dividend payout ratio3
80.1%
80.5%
(40bps)
1. The Group has adopted AASB 17 Insurance Contracts and has restated the comparative period. The impacts of adoption are detailed in Note 20
of the 2024 financial statements.
2. Health Insurance operating profit excludes the impacts of COVID-19.
3. Underlying NPAT is statutory NPAT normalised for growth asset returns to historical long-term expectations, credit spread movements, movement
in COVID-19 reserve and one-off items. Dividend payout ratio based on underlying NPAT.
Operating and financial review
Annual Report 2024 23
24 Medibank
Operating and financial review
Medibank has adopted AASB 17 Insurance Contracts
(AASB 17) from 1 July 2023 and has applied it retrospectively,
resulting in the restatement of the financial results for the
comparative period. The impacts of AASB 17 are detailed
in Note 20 of the 2024 financial statements.
Unless otherwise stated, discussion of performance in this
section of the report is on a management basis, which is
consistent with how performance is assessed internally.
This includes reporting the impacts of COVID-19 outside
of Group operating profit.
Medibank is subject to certain litigation and regulatory
proceedings in connection with the cybercrime event
identified in October 2022. Refer to Note 12(a) of the 2024
financial statements for further detail.
Group
Medibank’s 2024 financial results reflect the continued
resilience of our resident Health Insurance business,
demonstrates the important contribution of our non-resident
insurance business to overall fund growth, and highlights both
the organic and inorganic growth potential in Medibank Health.
Group operating profit was up 7.9% to $699.8 million, with a
6.3% increase in Health Insurance operating profit and strong
growth in Medibank Health segment profit of 36.7%, including
the benefit of our increased investment in Myhealth.
Net investment income increased by $43.6 million to
$182.2 million. This was partially offset by $39.8 million of
non-recurring costs for IT security uplift, and legal and other
costs related to regulatory investigations and litigation
associated with the 2022 cybercrime event. We expect
similar costs for these matters in 2025, including investment
associated with uplifting business resilience and customer
trust (excludes the impacts of any potential findings or
outcomes from regulatory investigations or litigation).
Reported net profit after tax (NPAT) attributable to
Medibank shareholders increased from $308.6 million
to $492.5 million. However, this has been significantly
impacted by the adoption of AASB 17, which decreased
2024 statutory NPAT by $77.6 million due to the timing and
value of COVID-19 claims savings and give backs. This
compares to a $203.0 million reduction in NPAT in the prior
period. Underlying NPAT, which adjusts for movement in the
COVID-19 equity reserve and normalisation of investment
returns, increased 14.1% to $570.4 million.
Reported earnings per share (EPS) was 59.6% higher at
17.9 cents per share, while underlying EPS was up 14.1%
to 20.7 cents per share.
The key reasons for the movements in the Health Insurance
and Medibank Health results, as well as net investment
income, are outlined in this report.
Health Insurance financial performance
Year ended 30 June ($m)
2024
2023
(restated)1
Change
Premium revenue
7,903.0
7,600.4
4.0%
Net claims expense (including risk equalisation)
(6,595.8)
(6,380.5)
3.4%
Gross profit
1,307.2
1,219.9
7.2%
Management expenses
(614.9)
(568.6)
8.1%
Operating profit
692.3
651.3
6.3%
Gross margin
16.5%
16.1%
40bps
Management expense ratio
7.8%
7.5%
30bps
Operating margin
8.8%
8.6%
20bps
1. The Group has adopted AASB 17 Insurance Contracts and has restated the comparative period. The impacts of adoption are detailed in Note 20
of the 2024 financial statements.
Our resident health insurance business has remained
resilient with solid earnings growth, while there was strong
momentum in our non-resident portfolio.
Gross profit was up 7.2%, with favourable age claiming
patterns benefiting risk equalisation and positive benefits
emerging from our disciplined approach to growth.
Despite higher operating expenses driven by inflation
and increased sales commissions, we saw lower claims in
extras as customers seek to reduce expenditure, resulting
in a largely offsetting impact on our gross margin and
management expense ratios.
1. Industry average, resident policyholders, APRA quarterly private health insurance statistics to March 24 with estimate for June 24 quarter.
Industry and customer growth
The resident health insurance market has remained buoyant
with policyholder growth in 20241 expected to be similar
to the 1.9% growth in 2023. The market has continued to
be competitive with customers seeking to offset cost-of-
living pressures. This has resulted in a modest increase in
the number of customers both lapsing and switching funds,
and a higher cost of acquisition, including from a higher
percentage of sales through aggregators.
Our reported resident policyholders increased by 14,400 or
0.7% with a modest 0.2% decline in the Medibank brand and
3.4% growth in ahm. The resident acquisition rate increased
50 basis points to 11.0%, with Medibank’s acquisition rate of
Annual Report 2024 25
8.9% returning to pre-2022 cybercrime levels. While the ahm
acquisition rate increased 100 basis points to 18.1%, the cost of
acquisition rose as a result of higher aggregator sales, reflecting
both the current economic and competitive environments.
Our resident lapse rate was 40 basis points higher at 10.3%,
reflecting higher levels of switching in the market. The overall
lapse increase was below the industry average2, driven by
performance in the Medibank brand. ahm experienced
a higher lapse impact, reflecting that customers are
more price sensitive, particularly when acquired through
aggregator platforms.
Aided by further benefit from Adult Dependant Reform (ADR),
growth in hospital lives of 0.9% to approximately 3 million
was 20 basis points above resident policyholder growth and
skewed towards younger customers under the age of 30.
Looking forward, we will remain disciplined as we aim to
grow in line with market during 2025, including volume
growth in the Medibank brand, by further capitalising on
our dual brand strategy, increasing focus on our priority
segments including the growing corporate market, and
supporting retention, including through adding additional
product benefits and future customer give backs.
In the non-resident business, we saw momentum continue with
policy units increasing by 25.1% to 343,900 with particularly
strong growth in the student and workers segments. We
have continued to see policy unit growth in the new financial
year and expect solid policy unit and market share growth
in the student and workers segments to continue in 2025,
notwithstanding the potential for lower visa numbers.
Revenue
Health insurance revenue increased 4.0% to $7,903.0 million
reflecting a 3.2% increase in resident revenue to
$7,636.6 million and an increase in non-resident revenue
of 34.9% to $266.4 million.
Claims
Total resident gross claims increased by 2.8% to
$6,384.1 million and net claims, which includes risk
equalisation, increased by 2.7% to $6,420.6 million.
Resident claims growth per policy unit decreased 20 basis
points to 2.2%, with a 100 basis point decrease in extras
claims growth, partially offset by a 10 basis point increase
in hospital claims growth. The increase in hospital claims
growth was driven by higher private hospital indexation,
which was largely offset by an improved risk equalisation
outcome and lower utilisation growth particularly in non-
surgical claims. While non-surgical claims remain soft, private
surgical claims have been broadly in line with expectations
since January. The decrease in extras claims growth reflects
both the impact of the economic environment on consumer
spending across all services except dental, and the
investment in additional benefits in the prior period.
In 2025 we expect claims growth per policy unit of around
2.7%, with economic conditions continuing to impact extras
claims growth, higher hospital indexation partially offset by
2. APRA quarterly private health insurance statistics to Mar-24.
a higher proportion of same day or short stay admissions,
continued softness in non-surgical claims growth, and also
includes the impact of investment in product benefits.
Non-resident net claims expense increased by 33.6% to
$175.2 million in line with continued strong policy unit growth.
Gross profit
Total gross profit increased 7.2% to $1,307.2 million, with
gross margin improving 40 basis points to 16.5%.
Resident gross margin increased 30 basis points to 15.9%
with revenue growth per policy unit remaining above claims
growth per policy unit. The growth in revenue per policy
unit remained stable at 2.6% and despite the economic
environment, downgrading remained unchanged at 50 basis
points. From 1 April 2024, an average premium increase
of 3.31% was applied. While we expect the economic
environment, including higher spend on offers, will impact
downgrading in 2025, we expect this to be largely offset
by ongoing portfolio management and sales mix activities.
In our non-resident portfolio, we have continued to see
strong growth particularly in the student and working visa
segments, driving an uplift in policy units and revenue of
25.1% and 34.9% respectively. Non-resident gross profit
increased 37.3% to $91.2 million, with gross margin up
60 basis points to 34.2% reflecting stable tenure and mix.
We will continue to invest in differentiation through product
value and expand our health offering, while increasing our
focus in the worker and visitor segments to support non-
resident portfolio growth in the medium term.
Operating costs
Management expenses increased 8.1% to $614.9 million,
with higher sales commissions and inflationary impacts,
partially offset by savings from our productivity program.
The major driver of expense growth was increased
sales commissions, particularly in 1H24, with total sales
commissions up $15.6 million this year. Strong non-
resident customer growth continued, while resident sales
commissions were higher in line with increased ahm sales
through aggregator platforms this period.
Operating expenses were up 6.7%, driven by cost inflation
of approximately 5.0%, alongside a $5 million uplift in
IT security costs, statutory charges (including Victorian
payroll tax) of $3 million and volume impacts, particularly
in non-resident. These increases were partially offset by
approximately $10 million of productivity savings stemming
from increased use of digital channels, operational process
improvements and technology support costs.
The major drivers of expense growth in 2025 will be cost
inflation, although we expect this will have peaked in 2024,
and a more modest increase in sales commissions, partially
offset by a further $10 million of productivity savings, including
the benefit from relocating to the new Melbourne head office.
26 Medibank
While the management expense ratio (MER) was 30 basis
points higher at 7.8%, we will continue to leverage our
productivity program and benefits of scale to target a stable
to modestly improving ratio, noting the challenges this higher
inflationary environment presents to achieving this aspiration.
Medibank Health financial performance
Medibank Health’s segment profit increased by 36.7%
to $60.4 million, driven by strong organic growth and a
significant uplift in the contribution from Myhealth. This
was partially offset by a $4.8 million loss from our growing
portfolio of strategically important short stay hospital
investments, including expected initial losses from two
hospitals which opened in 2H24.
The following section outlines Medibank Health’s financial
performance excluding the increased investment in
Myhealth, which is detailed separately.
Medibank Health (excluding Myhealth)
Revenue increased 4.8% to $290.4 million, with strong growth
in health and wellbeing and diversified insurance, and an uplift
in homecare revenue in line with hospital industry activity.
Gross profit was up 18.9% to $156.7 million with a 630 basis
point improvement in gross margin to 53.9%. This was due
to strong growth in higher margin businesses, improved
efficiency in homecare and a higher telehealth margin
following business optimisation in 2023.
Management expenses were $16.5 million higher, reflecting
business mix, inflation and investment in future growth.
Whilst the management expense ratio increased, operating
margin was up 210 basis points to 18.1%.
Myhealth
We increased our investment in Myhealth Medical Group
from 49.0% to 90.1% in January 2024. The Myhealth business
continues to track well, with increasing consult numbers,
improved billing mix and better operating efficiency.
Consolidated operating profit in 2025 will reflect a full
12-month contribution from Myhealth.
Net investment income
Medibank’s investment portfolio was $3.7 billion as at 30
June 2024. This investment portfolio, which includes $2.8
billion relating to the health fund and short-term operational
cash (STOC) of $0.6 billion, provides liquidity to cover
insurance liabilities related to the Health Insurance business
and satisfies our obligation to maintain regulatory reserves
to meet health claims and to fund ongoing operations. The
STOC balance consists largely of cash assets to fund claims
deferred due to COVID-19 and customer give back programs.
It sits outside our target allocation of growth and defensive
assets of 20% and 80% respectively, which is being revised
to 18% growth and 82% defensive assets from 2025.
Net investment income increased by $43.6 million to
$182.2 million, largely driven by a $43.5 million increase in
our defensive portfolio income which was partially offset
by a $6.3 million decrease in our growth portfolio income.
The increased income in our defensive portfolio reflects a
$27.4 million benefit from the higher RBA cash rate and a
$9.6 million benefit from narrowing credit spreads during the
period, alongside improved but still below expected return on
international fixed interest holdings. The $6.3 million decrease
in our growth portfolio investment income was largely due to
lower returns across all asset classes other than property.
Consistent with previous practice, we have adjusted net
investment income for the impact of short-term market
returns that are expected to normalise over the medium to
longer term in our underlying NPAT. After normalisation, net
investment income was up $60.5 million from $122.2 million in
2023 to $182.7 million. The $60.5 million increase in underlying
net investment income includes a $33.1 million benefit
from the higher RBA cash rate and improved manager
performance in property, which resulted in underlying
investment return increasing 188 basis points to 5.77%. This is
a 150 basis point spread to the average RBA cash rate. While
higher than 2023, it is at the bottom end of our target range
of 150 to 200 basis points, noting that this target is more
difficult to achieve in a higher interest rate environment.
Our investment portfolio is subject to and compliant
with our Responsible Investment Policy. Domestic and
international equity investment portfolios remain aligned
with socially responsible investment principles.
2.2 Group financial position
Medibank’s net asset position increased by $61.4 million
or 2.7% to $2,305.1 million as at 30 June 2024. Some of the
major movements in the consolidated statement of financial
position include:
• An increase in insurance contract liabilities due to the
customer give back provision relating to the return
of permanent net claims savings due to COVID-19 to
customers.
• An increase in cash and cash equivalents and financial
assets at fair value to fund our customer give back programs.
2.3 Capital management and dividends
Medibank’s capital management objective is to maintain
a strong financial risk profile and capacity to pay all
eligible customer benefits, invest in the growth of our
business to provide a return to shareholders and to meet
financial commitments.
• On 1 July 2023, accounting standard AASB 17 Insurance
Contracts and the new APRA capital standards became
effective. As previously advised, the introduction of these
new standards, increased our eligible capital position by
$167.0 million.
• In June 2023 APRA announced an additional capital
adequacy requirement of $250 million for Medibank,
with effect from 1 July 2023, following a review of the
2022 cybercrime event. As a result, we have temporarily
increased Health Insurance business related capital to
offset this supervisory adjustment.
Operating and financial review
Annual Report 2024 27
• Health Insurance required capital was $1,161.6 million
at 30 June 2024 and 1.8 times3 the prescribed capital
amount (PCA), with unallocated capital of $186.2 million
at 30 June 2024.
• The target health insurance capital ratio is between
10% and 12% of premium revenue, however, the current
ratio of 14.1% sits above this range to offset the
$250 million temporary APRA supervisory adjustment.
• The $121.8 million increase in other capital employed
to $447.6 million includes the $52.0 million further
investment in Myhealth and $25.0 million relating to the
fit-out cost for our new Melbourne head office. Other
effects include funding growth in Medibank Health,
investments in non-controlled entities, and higher
regulatory capital adjustments.
3. Calculated as Required Health Insurance capital less APRA supervisory adjustment, divided by Fund PCA less APRA adjustment.
With a strong level of unallocated capital, we are well
placed to fund our $150 million to $250 million investment
aspiration and have the ability to raise Tier 2 debt if
attractive opportunities become available.
The table below sets out Medibank’s annual disclosure
of its APRA regulatory capital position at 30 June 2024.
• The APRA capital base definition is higher than the
Medibank reported eligible capital due to Medibank
specific adjustments including deducting the Dividend
accrual at 30 June 2024.
• The prescribed capital amount (PCA) for the health
benefits fund of $761.4m is consistent with the Medibank
reported basis, and includes the $250m temporary
APRA supervisory adjustment in operational risk.
• The PCA coverage ratio for the health benefits fund
is 1.9x on the regulatory basis, which is higher than the
Medibank reported basis (1.8x).
Year ended 30 June 2024 ($m)
Health
Benefits
Fund
General
Fund
Total
Insurer
Net Assets
1,756.8
423.7
2,180.5
Regulatory Adjustments
(286.4)
(172.4)
(458.8)
Common Equity Tier 1 Capital
1,470.4
251.3
1,721.7
Additional Tier 1 & 2 Capital
-
-
-
Capital Base
1,470.4
251.3
1,721.7
Insurance Risk Charge
221.2
-
221.2
Asset Risk Charge
234.8
55.4
290.2
Operational Risk Charge
408.1
-
408.1
Aggregation Benefit
(102.7)
-
(102.7)
Prescribed Capital Amount (PCA)
761.4
55.4
816.8
PCA Coverage Ratio
1.9x
4.5x
2.1x
Dividends paid or payable in respect of profits from the
financial year totalled 16.6 cents per share fully franked,
amounting to $457.2 million comprising:
• An interim ordinary dividend of 7.2 cents per share fully
franked, amounting to $198.3 million paid on 20 March 2024
in respect of the 6-month period ended 31 December 2023.
• A final ordinary dividend of 9.4 cents per share fully
franked, amounting to $258.9 million to be paid on
26 September 2024 in respect of the 6-month period
ended 30 June 2024.
• The full year 2024 ordinary dividend represents an
80.1% payout ratio of underlying NPAT, which is within
our dividend target payout ratio range of between
75% and 85% of underlying NPAT.
2.4 Management changes
In July 2023, we announced a number of changes to
the executive leadership team as part of our continued
focus on delivering our strategy and 2030 vision.
Since then, Felicia Trewin was appointed to Group Lead
– Data & Technology, with accountability for technology,
security, data management and our core platforms.
Robert Read was appointed to Group Lead – Amplar Health
following Dr Andrew Wilson’s decision to step back from the
executive leadership team and take on the role of Group
Chief Medical Officer. Robert is responsible for the Amplar
Health business, which contributes to Medibank’s growing
role as a health services provider. This includes responsibility
for the health services we deliver on behalf of our private
health insurance business and external customers in the
private and public sector, including telehealth, in-home care,
and our healthcare investments.
Tom Exton was appointed to the new role of Group Lead –
Chief Risk and Compliance Officer in July 2024. Tom has
accountability for Medibank’s Risk and Compliance function
which includes the successful delivery of the outcomes of
the Medibank Uplift Program and CPS 230 programs.
28 Medibank
3. Strategy and future prospects
Medibank’s purpose is Better Health for Better Lives. Our
vision is to create the best health and wellbeing for Australia.
Our strategy puts our customers and people at the centre
of everything we do. We connect people to a better quality
of life in every moment. By working to create access, choice
and control for Australia, we seek to sustainably build our
customer base and grow shareholder value.
Medibank’s strategy remained largely unchanged in 2024 as
we continued to deliver leading experiences, leverage our dual
brands to create differentiated value, and expand our role
as a health company. Delivering on initiatives that increase
value, choice and control for customers has been a key focus.
Our strategy to grow as a health company is enabling us to
differentiate our health insurance offering and improve the
health and wellbeing of our customers, our people and the
community, and is focused on proactively understanding and
addressing the health and wellbeing needs of our customers.
Operating and financial review
Delivering leading experiences
With customers at the heart of what we do, we have continued
to create personalised and connected customer experiences.
This year we continued trialling a new initiative to connect
customers with team members local to their area, leading to
a better customer experience and increased engagement
from our people. We plan to rollout this program nationally in
2025, giving our people more power to deliver personal and
localised services and health support to our customers.
We also supported more than one in four customers admitted
to hospital through our Health Concierge program and
piloted a new After Hospital Home Care service which
provides additional support for customers transitioning home
after a hospital stay to reduce avoidable readmissions.
We have remained focused on providing leading customer
experiences, including in the digital space. In line with this,
we have enhanced the capability and functionality of the
My Medibank app which now allows customers to claim for
all types of services. We have also redesigned the ahm app
to create a more straightforward, intuitive, and easy to use
experience. Artificial intelligence is now assisting with
almost 50% of support calls from our customers.
We recognise that our people are our most valuable asset.
This year we continued to foster a healthier, more engaged
and resilient workforce.
We have differentiated ourselves as an employer through
our approach to flexibility and health and wellbeing, with
promising interim results from our four-day work week
experiment. By reinventing the way we work, we aim to
empower our people to focus on what has the greatest
impact on our customers, patients and the community.
We have achieved our best Service NPS result over the
last four years for both ahm and Medibank, reflecting
our ongoing focus on our customers' experience.
We continue to strengthen our foundations to build
further business resilience and customer trust.
Differentiate our insurance business
During the year we have focused on delivering greater
value, better experiences and increased health and
wellbeing support for our customers.
Affordability remains a key issue for our customers,
particularly with cost-of-living pressures rising. We
announced an average 3.31% premium increase applicable
from 1 April 2024, which was lower than both inflation and
wage growth and remains below the 10-year historical
industry average of 3.8%. We continue to deliver on our
commitment to not profit from the pandemic, announcing
an additional $305 million in permanent net claims savings
which will be returned to customers.
Our strategy – growing as a health company
Better Health for Better Lives
Accelerate growth in prevention,
primary and virtual care and
other care models for the future
Scale and connect our existing
health businesses
Deliver more health services to
Medibank and ahm customers
Accelerate Australia’s health
transition
Expand
in health
Deliver more value, choice and
control for customers
Provide holistic health solutions
to customers including resident,
non-resident and corporate customers
Strengthen our dual brands and
provider networks
Lead change with partners
to deliver affordable healthcare
Differentiate our
insurance business
Create personalised and
connected customer experiences
Empower our people and
reinvent work
Collaborate with our communities
and partners to make a difference
Continue to strengthen trust
and reputation
Deliver leading
experiences
Annual Report 2024 29
This brings our total COVID-19 financial support package to
a record $1.46 billion to date. We expect the finalisation of
our customer give back program to be announced in 2025.
Further demonstrating our commitment to keep healthcare
affordable and provide greater value, we launched a range
of innovative products during the year, including Healthy
Living Extras which provides a low-cost private health option
for young adults. We have also introduced a range of new
silver and gold products that include no excess for patients
accessing our no gap program and provide payments and
benefits for private emergency department admissions.
Medibank also extended our 24/7 nurse and mental health
support line to all health insurance customers, giving an
additional 700,000 customers access to round the clock health
support services. In addition, the 24/7 nurse support service
is now available via chat through the My Medibank app.
We have continued to deliver better value, more cost
transparency and a wider range of services to our
customers through our expanding networks and initiatives.
Our no gap program, which covers out-of-pocket fees
for various specialist services, now covers five clinical
modalities and is within 25km of 68% of customers. Since
its inception in 2019 over 7,000 customers have saved more
than $3 million in out-of-pocket costs, with a 38% increase
in customers accessing the program this year. Meanwhile,
our expansive Members' Choice Advantage network
continues to deliver more value, saving customers over
$23 million in out-of-pocket costs this year.
Our health and wellbeing program Live Better continues to
scale with 823,000 participants and more than $25 million of
rewards redeemed in 2024. Customers can now earn points
through new partners including Calm, Youfoodz, Good &
Fugly, Everlast and parkrun. We also extended the program
to corporates and our younger customers aged 16 to 17 and
integrated key Live Better experiences into the My Medibank
app, making it easier for our customers to access, interact
and get rewarded through Live Better.
We have further invested in our growing suite of preventative
healthcare programs, designed to support our customers to
stay healthy and avoid unnecessary treatments. In addition
to our suite of clinician-led prevention programs, we have
introduced 2 self-paced digital prevention programs to
Live Better rewards, with around 132,000 enrolments across
all of these programs.
Expand in health
We have continued to be at the forefront of the health transition
by making targeted investments and working with a range of
partners across the primary, specialist and acute care sectors.
Our growth as a health company is a key differentiator.
This year we delivered over 4 million health interactions
through our Amplar Health network, which includes GP,
nursing, outpatient and mental health services.
We have also delivered more choice and control for
customers through our homecare programs, including
rehabilitation, wound care, and chemotherapy, which has
been accessed by more than 8,000 customers and saved
over 100,000 hospital bed days.
As part of our ongoing commitment to primary care, we have
increased our investment in Myhealth Medical Group from
49.0% to 90.1%. We recognise the critical role GPs play in
prevention, early detection and ongoing care, which has a
positive impact on avoidable hospitalisation and contributes
to a more sustainable health system. This investment will
allow further integration with other Medibank Health services
for the benefit of patients. For example, we have begun to
pilot GP-led programs in Myhealth clinics to improve the
health experiences of patients with chronic conditions.
Through our partnership with Aurora Healthcare and
delivered through iMH, we have continued to support
our commitment to integrated mental health care
models. iMH opened its second mental health facility in
New South Wales in January 2024, while a third mental
health hospital is set to open in Brisbane in late 1H25.
The expansion solidifies iMH’s commitment to providing
an integrated model of mental health care that aims to
reduce readmission and give patients more choice, value
and control in their care. Incorporating in-patient, day
attendance, community-based and in-home treatment,
it provides greater choice for psychiatrists and patients.
We continue to support care models for the future
through various doctor-led partnerships. The world-class
Orthopaedic Institute at Macquarie University Hospital
opened in February 2024, with a model of care that may
assist patients to return home sooner where clinically
appropriate. Meanwhile, Adeney Private Hospital in Kew
is set to open in late 1H25, expanding our no gap program
and reducing out-of-pocket costs for eligible patients.
East Sydney Private Hospital also recently expanded their
facilities to meet the growing demand for short stay surgical
options. In addition to supporting private patients, around
15% of the hospital’s activity this year was public surgery
to help reduce waiting lists in the public system.
Future prospects
The health insurance industry has remained buoyant
with consumers continuing to prioritise health, despite
the economic environment and competitive landscape
intensifying. Our goal is to generate sustainable growth
in our insurance business. In the short-term, this means
being disciplined. In 2025, we are targeting key customer
segments including corporate, new-to-industry, families,
and non-resident, whilst managing our channel mix to
minimise acquisition costs. We will continue to strengthen
our relationship with customers by scaling propositions such
as prevention programs and Live Better. These offerings,
combined with our dual-brands, places Medibank in a
strong position as the market rebalances. We anticipate
moderating industry growth in 2025 relative to 2024.
We will remain disciplined as we aim to grow in line with
market during 2025, which includes volume growth in the
Medibank brand, and aim to grow market share in 2026.
30 Medibank
Operating and financial review
We’re committed to keeping the private health industry
affordable. Here, we aim to expand the breadth and
depth of our partnership approach with providers. Going
forward, we will continue to strengthen initiatives that
provide mutually beneficial outcomes to our customers,
providers, and Medibank. This includes further scaling our
prevention, no gap and short stay programs. However, we
recognise that we also play an important role in supporting
the sustainability of the system. Reflecting this, we will
continue to monitor our management expenses. Since 2018,
we’ve made around $112 million in productivity savings, with
another $10 million targeted in 2025.
We are working to give people greater access, choice and
control of their healthcare, so they can access the care
they need in the way they want. This health transition can
improve the outcomes and affordability of healthcare
across Australia while enabling us to grow as a business.
Medibank is accelerating this transition through our
investments and partnerships, with a focus on prevention,
primary care, virtual health, homecare and other models
of care in partnership with clinicians and health providers.
Reflecting this, we continue to target average organic profit
growth of at least 15% per annum between 2024 and 2026
in Medibank Health. Further, we aim to invest between
$150 million to $250 million in total to grow Medibank
Health inorganically over 2024 to 2026.
We have made progress against our strategy, which we
will continue to build upon during 2025. While our strategic
pillars remain unchanged, we have updated some of our
priorities for 2025. In the year ahead, we will continue to
strengthen the foundations of our business and accelerate
Australia’s health transition to support the sustainability of
the health system.
Aligned with our updated priorities and reflecting on our
progress, we have revised several of our milestones for 2025.
We are evolving the way we measure customer advocacy
to better understand our customers’ experience, creating
a greater connection between our frontline teams and
our customers. In line with this, we will begin transitioning
from Service NPS to Journey NPS for Medibank in 2025,
while ahm is expected to move to Journey NPS in 2026.
We have also adjusted our prevention milestone to reflect
the expanded range of prevention initiatives we offer,
which include self-paced digital prevention programs
as well as our clinician-led health prevention programs.
Our updated milestones are outlined below.
Milestones
Pillars
Milestones
Deliver leading
experiences
Differentiate
our insurance
business
Expand
in health
1. In 2025, Medibank will transition to Journey NPS for private health insurance customer journeys, while ahm is expected to move to Journey NPS in 2026.
2. FY25 benchmarks are based on the global average adjusted for Australian healthcare and financial insurance industry context.
3. Resident policyholders, APRA quarterly private health insurance statistics (Mar 24).
4. Medibank Health organic profit target is in addition to 12 month contribution from Myhealth.
5. Increased investment in Myhealth Medical Group. Effective 5 January 2024.
6. Total enrolments in clinician-led preventative health programs (e.g. Better Knee, Better Me, Better Hip) and Live Better self-paced digital prevention
programs (e.g. Back Smart, Heart Wise) and any new offerings developed.
4. Material business risks
Please refer to pages 49 to 50 of the risk management section for an overview of our material business risks.
Customer advocacy: Service NPS and Journey
NPS (average)
FY24
FY24
benchmark
FY25
benchmark (updated)1
Medibank
46.0
>35
>10 (jNPS)
ahm
46.4
>35
>35 (sNPS)
Employee advocacy: eNPS (average)
FY24
FY25
benchmark2
Place to work
26
≥24
Products and services
30
≥26
Resident policyholder market share
FY23
March FY24
FY27 aspiration
27.08%
26.75%3
up 25 bps – 75 bps
on FY24
Health Insurance productivity
FY24
FY24-FY25 target
c. $10m
$20m productivity savings including
$10m in FY24
Medibank Health
FY24
FY24–FY26 target
Organic
profit4
$52.6 m
Targeting average organic
profit growth ≥ 15% per
annum (FY23: $44.2m)
Investment
c. $52 m5
Aim to invest $150m – $250m
in total to grow Medibank
Health inorganically as
suitable opportunities arise
Health and wellbeing
FY24
FY25 target
Live Better rewards
participants
823k
900k
Preventative program
enrolments6
132k
>190k
Annual Report 2024 31
Directors
33%*
are women
11%*
were born overseas
100%* identify primarily
as Australian
(non-Aboriginal and Torres Strait Islander)
*As at 22 August 2024, including CEO
Mike Wilkins AO
Age: 67
Chair and Independent
Non-executive Director
BCom, MBA, FAICD, FCA
Chair: Member:
David Koczkar
Age: 51
Chief Executive Officer
BCom, PG Dip Finance, MAICD
Dr Tracey Batten
Age: 58
Independent Non-executive Director
MBBS, MHA, MBA (Harvard), FAICD, FRACMA
Chair: Member:
Mike was appointed a director in May 2017 and Chair effective 1 October 2020.
He has more than 30 years of experience in financial services, predominantly in
Australia and Asia.
Relevant other directorships: Chair – QBE Insurance Group Limited (since Mar 2020)
and director (since Nov 2016); director: Scentre Group Limited (since April 2020).
Relevant former directorships/executive roles: Managing Director and Chief
Executive Officer (Nov 2007 to Nov 2015) – Insurance Australia Group;
Managing Director and Chief Executive Officer – Promina Group Limited;
Managing director – Tyndall Australia Limited; Acting Chief Executive Officer
(Apr 2018 to Dec 2018); Executive Chairman (Apr 2018 to June 2018) and director
(Sept 2016 to Feb 2020) – AMP Limited; director: Maple-Brown Abbott Limited; Alinta
Limited; The Geneva Association; The Australian Business and Community Network.
Chief Executive Officer since May 2021. David has more than 25 years of strategy,
innovation, commercial and operational experience across Australia, Asia and the
UK, including previous work in the consulting and financial services industries.
David joined Medibank in 2014 as Chief Operating Officer and then Group Executive
– Chief Customer Officer from Sept 2016, responsible for the Medibank and ahm
Health Insurance and Diversified financial portfolios. He was appointed Acting
Chief Executive Officer between Apr 2016 and June 2016.
Relevant other directorships: Member of the Council of Management for the
International Federation of Health Plans.
Relevant former directorships/executive roles: Group Chief Commercial Officer
(2008 – 2014) – Jetstar; director – Jetstar Pacific (Vietnam); Jetstar Hong Kong;
NewStar airline group (Singapore).
Tracey was appointed a director in August 2017. She has extensive experience in the
health services sector, with strong commercial, business and change leadership skills.
Relevant other directorships: Chair – Accident Compensation Corporation;
director – EBOS Group Limited (since July 2021); Nanosonics Limited (since Sept 2023).
Relevant former directorships/executive roles: director – Abano Healthcare Group;
National Institute of Water and Atmospheric Research, NZ. Executive roles:
Chief Executive – Imperial College Healthcare NHS Trust UK; Chief Executive – St
Vincent’s Health Australia; CEO of a number of other healthcare groups in Australia.
Audit Committee
Risk Management
Committee
Investment and
Capital Committee
People and
Remuneration Committee
Nomination Committee
32 Medibank
Directors
Gerard Dalbosco
Age: 61
Independent Non-executive Director
M.AppFin, B.Comm, FCA, FFIN, GAICD
Chair: Member:
Peter Everingham
Age: 55
Independent Non-executive Director
BEc, MBA, GAICD
Member:
David Fagan
Age: 67
Independent Non-executive Director
LLB, LLM, GAICD
Chair: Member:
Gerard was appointed a director in May 2021. A partner of EY until September
2020, Gerard held a number of senior leadership roles including Oceania Managing
Partner and CEO; Asia Pacific Joint Deputy CEO and Managing Partner-Markets;
Oceania Managing Partner-Transaction Advisory Services; and Melbourne
Managing Partner. Prior to these roles Gerard advised organisations across a range
of sectors in respect of merger and acquisitions advice, valuations, and strategic,
commercial and financial due diligence.
Relevant other directorships: Chair – Melbourne Archdiocese Catholic Schools;
Gillespie Family Council & Gillespie Family Foundation; director – Melbourne Prize Trust.
Relevant former directorships/executive roles: director and Chair (Finance & Audit
Committee) – Mercy Health & Aged Care; director and member of the Finance
Committee; Berry Street Victoria – director and Co-Deputy Chair – Committee for
Melbourne.
Peter was appointed a director in March 2022. He has over 25 years of corporate
experience and is highly respected in the digital sector, having held senior executive
roles in that sector for 18 years. His senior leadership experience includes key roles
at companies with a strong consumer and technology focus.
Relevant other directorships: director – Super Retail Group Limited (since Dec 2017);
governor and director – WWF Australia.
Relevant former directorships/executive roles: director – iCar Asia Limited (July 2017
to May 2022); Managing Director international division (and concurrently Chair of
Seek’s subsidiary, Zhaopin) – Seek Limited; director – ME Bank; IDP Education Ltd.
Executive roles: senior executive – Yahoo! Australia and Southeast Asia.
David was appointed a director in March 2014. He practised as a commercial lawyer
for over 40 years. During that time, he held a variety of leadership positions at Clayton
Utz culminating in the role of Chief Executive Partner for 9 years. In this role, David had
responsibility and accountability for leadership and transformation, strategy, finance,
stakeholder engagement, and governance, including risk management. During David’s
tenure as Chief Executive Partner, Clayton Utz entrenched itself as a first-class top tier
commercial law firm. David also chaired the Medibank Privatisation Committee which
operated during 2014 in preparation for the privatisation process.
Relevant other directorships: Chair – BDO Group Holdings Limited and member of its
Risk Management Committee.
Relevant former directorships/executive roles: director – The Global Foundation and
Chair of the Audit Committee; PayGroup Limited (Nov 2017 to Nov 2022); Grocon Funds
Management Group; the Hilco Group; UBS Grocon Real Estate Investment Management
Australia Pty Limited; advisory board member – Chase Corporate Advisory.
Kathryn Fagg AO
Age: 63
Independent Non-executive Director
FTSE, BE (Hons), MCom (Hons), Hon.DBus, Hon.
DChemEng, FAICD
Member:
Kathryn was appointed a director in March 2022. She is a highly respected director and
Chair with significant, wide-ranging senior commercial and operational experience.
Relevant other directorships: Chair – CSIRO; Watertrust Australia Ltd; Breast Cancer
Network Australia. director – National Australia Bank Ltd (since Dec 2019); Djerriwarrh
Investments Ltd (since May 2014); The Myer Foundation, Grattan Institute and the
Champions of Change Coalition.
Relevant former directorships/executive roles: Chair – Boral Limited (July 2018
to July 2021) and director (Sept 2014 to July 2021); Chair – Parks Victoria;
Melbourne Recital Centre; President – Chief Executive Women (CEW);
director – Incitec Pivot Limited (Apr 2014 to Dec 2019); Board member – Reserve
Bank of Australia (2013 to 2018); Australian Centre for Innovation.
Annual Report 2024 33
Linda Bardo Nicholls AO Age: 76
Independent Non-executive Director
BA, MBA (Harvard), FAICD
Chair: Member:
Linda was appointed a director in March 2014. She has more than 30 years of
experience as a senior executive and director in banking, insurance and funds
management in Australia, New Zealand and the United States.
Relevant other directorships: Chair – Royal Melbourne Hospital;
director – Inghams Group Limited (since Nov 2016); Museums Victoria Board.
Relevant former directorships/executive roles: Chair – Japara Healthcare Ltd
(Mar 2014 to Nov 2021); Chair – Healthscope Ltd (2008 to 2010) and director
(2002 to 2008); director – Fairfax Media Limited; Sigma Pharmaceuticals Limited.
Jay Weatherill AO
Age: 60
Independent Non-executive Director
LLB, BEc, GDLP, GAICD
Member:
Jay was appointed a director in March 2024. He has had a distinguished career in
public office with expertise across a wide range of public policy areas including
reform of social services.
Premier of South Australia for more than 6 years, Jay was elected to Parliament
in 2002, serving 16 years in a diverse range of portfolios including treasury, state
development, education, Aboriginal affairs and the environment. Prior to this, he
practised law, specialising in employment law. Jay leads the Thrive by Five campaign
delivering the Minderoo Foundation’s early childhood agenda. He is also an Industry
Professor at the University of South Australia and an ambassador for Reggio Children.
Relevant other directorships: Chair – Leeuwin Ocean Adventure Foundation
director – Keystart WA; Infrastructure WA; Coaxial Foundation.
Mei Ramsay
Group Lead – Trust, Legal & Company
Secretariat and Company Secretary
BA, LLB, LLM
Mei is responsible for leading the customer trust, legal and governance functions
including regulatory affairs. Mei also holds the positions of Group General Counsel
and Company Secretary. She has been a member of the executive leadership team
since 2016.
Mei has more than 25 years of experience as a senior in-house legal adviser for
multinational and international companies as well as private practice. Prior to joining
Medibank, she was the General Counsel and Company Secretary for the Asia Pacific
region at Cummins Inc. and also held senior legal positions at Coles Myer Ltd and
Southcorp Limited. Mei started her legal career at Arnold Bloch Leibler and also
worked as a Senior Associate at Minter Ellison.
Relevant former directorships/executive roles: President (immediate past)
– Association of Corporate Counsel (ACC) Australia; Chair (former) – ACC GC100;
Member – Chief Executive Women
Company Secretary
Audit Committee
Risk Management
Committee
Investment and
Capital Committee
People and
Remuneration Committee
Nomination Committee
34 Medibank
Executive leadership team
Kylie Bishop
Group Lead – People, Spaces
& Sustainability
Tom Exton
Group Lead – Chief Risk
& Compliance Officer
Milosh Milisavljevic
Group Lead – Chief Customer Officer
Rob Deeming
Group Lead – Digital & Ventures
Kylie is responsible for leading key people functions including culture, talent and
capability, performance and rewards, shared services, diversity and inclusion,
recruitment, workplace relations, health, safety and wellbeing, employee experience
and community as well as sustainability and spaces. She has been a member of the
executive leadership team since 2013.
Kylie is a registered psychologist specialising in organisational psychology. She
began her career in people and culture consulting and prior to joining Medibank in
2010, held senior positions with NAB.
Relevant directorships: Non-executive director – Royal Melbourne Hospital and
Basketball Victoria; director (previous) – Rugby Victoria
Tom is responsible for risk and compliance across Medibank. He has been a member
of the executive leadership team since July 2024.
Since joining Medibank in 2006, Tom has held a range of finance roles and worked
closely with the financial operations side of the Health Insurance business. Tom also
oversaw the establishment of the Medibank Uplift Program in 2023, focusing on
managing our approach to information security risk.
Prior to Medibank, Tom spent 11 years at Deloitte, working for five years with private
business clients and six years in management consulting across a number of
industries including health insurance.
Relevant directorships: director – Medinet Australia Pty Ltd
Milosh is responsible for the Medibank and ahm brands including marketing,
customer channels, customer portfolios, member health programs, Live Better,
provider partnerships and diversified insurance. He has been a member of the
executive leadership team since June 2021.
Milosh joined Medibank in 2016 and has held a number of roles leading customer
strategy, commercial transformation, product innovation and portfolio management,
strategic partnerships and data science.
Milosh has extensive experience leading customer focused and data driven
transformations across health, media and telecommunications industries, including
proposition innovation and new business growth. Prior to joining Medibank, Milosh
held senior roles at SEEK and McKinsey & Company.
Relevant directorships: director – Private Healthcare Australia Limited
Rob is responsible for accelerating our growth in health through the development of
digitally-led health products and services for our customers and the community. Rob
also leads the digital team supporting our insurance and health businesses. He has
been a member of the executive leadership team since June 2021.
Rob was previously accountable for growing and sustaining the Medibank and ahm
insurance businesses, including oversight for our operational and customer-facing
teams. Prior to that he led the ahm business.
Rob has extensive experience in entrepreneurial leadership, as well as high-growth
consumer brands. Before joining Medibank, Rob was the CEO of multi award-winning
hardware/software business, Billy. He has also held commercial leadership roles at
Jetstar and Qantas, and was the CEO of the travel booking engine, Jetsetter, which
he sold to Tripadvisor.
Relevant directorships: Chair – Medinet Australia Pty Ltd
40%*
are women
20%*
were born overseas
90%* identify primarily
as Australian
(non-Aboriginal and Torres Strait Islander)
*As at 22 August 2024, including CEO
Annual Report 2024 35
Rob Read
Group Lead – Amplar Health
Mark Rogers
Group Lead – Chief Financial Officer
& Group Strategy
Rob oversees Medibank’s growing role as a health services provider. He is responsible
for the health services we deliver on behalf of our health insurance business as well
as to customers in the private and public sector. These include prevention programs,
telehealth, in-home care, and our healthcare investments across short stay hospitals
and primary care. He has been a member of the executive leadership team since
November 2023.
Rob joined Medibank in 2022 as Amplar Health’s Chief Commercial Officer,
responsible for evolving its health services strategy including our focus on virtual
health and growing our prevention services.
Prior to joining Medibank, Rob held senior roles in Private Equity and at leading
pharmaceutical company, GSK PLC. Most recently Rob was CEO and Managing
Director at MedAdvisor Ltd, a technology-led medication adherence company
operating in Australia, US and the UK.
Relevant directorships: director – Adeney Private Hospital; Chair – Myhealth Medical Group
Mark is responsible for the finance, actuarial, treasury, internal audit, investor
relations and procurement functions across Medibank as well as group strategy and
M&A. He has been a member of the executive leadership team since January 2017.
Mark has more than 25 years of global experience across the financial services,
healthcare, pharmaceuticals and logistics sectors. Before joining Medibank, Mark
held senior financial and group development roles at NAB and prior to that he
was responsible for strategy, M&A and investor relations for the former ASX listed
healthcare, pharmaceuticals and logistics company Mayne Group.
Relevant directorships: director – Myhealth Medical Group, Integrated Mental Health,
East Sydney Private Hospital and Royal Children’s Hospital Melbourne
David Koczkar
Chief Executive Officer
Mei Ramsay
Group Lead – Trust, Legal & Company
Secretariat and Company Secretary
Meaghan Telford
Group Lead – Policy, Advocacy
& Reputation
Felicia Trewin
Group Lead – Data & Technology
Meaghan is responsible for government and industry relations, health stakeholders,
health policy, reputation and external communications. Meaghan joined Medibank
in 2016 leading the External Affairs function and previously held the role of Senior
Executive – Policy, Advocacy and Reputation. She has been a member of the
executive leadership team since July 2023.
Meaghan is a corporate affairs professional with a career spanning more than
20 years in sport, politics and ASX listed entities. In these roles, she has been
responsible for driving the external agenda for organisations through media
management, government relations, campaign and stakeholder management,
employee engagement and public affairs research.
Prior to Medibank, Meaghan led Group Corporate Communications for NAB,
responsible for communications on mergers and acquisitions, customer pricing
strategy, financial reporting and issues management.
Felicia leads the Data & Technology team, responsible for our technology, security,
data management and core platforms.
She joined Medibank in February 2024 from AMP, where as Chief Technology Officer
she played a pivotal role in developing their technology strategy and accelerating
the adoption of digital and data technology across the group.
Felicia has more than 25 years of experience in technology and transformation,
including leading the technology services function at Australian Super, and
establishing ANZ’s Digital Labs to prototype and test emerging technologies.
She has also held senior roles at Microsoft, Deloitte, and Accenture.
Please refer to page
31 and 33 for bios.
36 Medibank
Corporate governance statement
Medibank was founded in 1976 as a private health insurer
and was operated by the Australian Government. In 1998,
Medibank Private Limited became the operating entity with
the Commonwealth of Australia as the sole shareholder. In
2014 the Australian Government sold Medibank by way of an
initial public offering, and divested all its shares in Medibank.
Medibank listed on the Australian Securities Exchange (ASX)
on 25 November 2014.
The Medibank Board is committed to improving our
customers’ experience and providing them with greater
value. In line with this, the Board seeks to ensure that
Medibank is properly managed to protect and enhance
shareholder interests, and that Medibank, its directors,
officers and employees operate in an appropriate
environment of corporate governance.
Governance structure
The Board has a framework in place for governing
Medibank. This includes adopting internal controls, risk
management processes and corporate governance
policies and practices, designed to promote responsible
management and ethical conduct.
During the year, Medibank had in place policies and
practices which comply with the recommendations in the
ASX Corporate Governance Council Corporate Governance
Principles and Recommendations (CGPRs), 4th edition. As a
registered private health insurer, Medibank also complies with
the CPS 510 governance standard issued by the Australian
Prudential Regulation Authority (APRA). The key corporate
governance practices applied at Medibank are described in
this statement and the key corporate governance policies are
available on the corporate governance section of our website
at medibank.com.au.
The governance and performance of Medibank is
overseen by the Board elected by the shareholders.
Roles and responsibilities of the Board and
management
The Board provides overall strategic guidance for Medibank
and effective oversight of management. Responsibility for
the governance of Medibank, including establishing and
monitoring key performance goals, rests with the Board.
The Board monitors the operational performance and
financial position of Medibank, as well as overseeing
the business strategy and approving strategic goals. In
performing its role, the Board is committed to ensuring
sound corporate governance practices.
The Board Charter, which is available on our website,
articulates the Board’s roles and responsibilities, its
membership and operation, and which responsibilities may
be delegated to committees or to management. Specific
responsibilities have been reserved by the Board in key
areas of: strategy (including approval and monitoring of the
corporate strategy and performance objectives); governance
(including disclosure); appointment, performance evaluation
and remuneration of the Chief Executive Officer (CEO) and
other senior executives, including the Company Secretary;
approving the Code of Conduct and overseeing Medibank’s
purpose, culture and values; financial approvals and reporting;
risk management, compliance and workplace health and
safety; and culture (including diversity and inclusion). The Board
has established standing committees to assist in performing its
responsibilities. These committees examine particular issues in
detail and make recommendations to the Board. A description
of these committees can be found on pages 40 to 41.
The CEO has responsibility for managing the day-to-day
affairs of Medibank. The CEO, with the support of the
executive leadership team (ELT), manages Medibank in
accordance with the Board-approved Corporate Plan, the
corporate strategy and Medibank’s policies within the risk
appetite set by the Board. A detailed delegation of authority
framework defines the decision making and expenditure
limits that apply at various levels of management.
Medibank Private Limited Board
Oversees management of Medibank on behalf of shareholders
Audit
Committee
Oversees
financial
reporting
Risk Management
Committee
Oversees current
and future risk
management
Investment and
Capital Committee
Oversees investment
and capital
management
activities
People and Remuneration
Committee
Oversees key remuneration
and people policies
and practices
Nomination
Committee
Oversees board
and committee
membership and
succession planning
Chief Executive Officer
Responsible for the day-to-day management of Medibank and implementation of the strategic objectives
Executive leadership team
Supports the Chief Executive Officer with running the business and delivering on the strategic objectives
Annual Report 2024 37
Key areas of focus for the Board in 2024
Corporate governance
• Oversight of COVID-19 impacts and response, including
ensuring we don’t profit from COVID-19 by returning any
permanent net claims savings to customers.
• Continuing to embed and strengthen our enterprise
risk and compliance management framework and risk
and compliance culture, including the implementation
of CPS 230 and the Financial Accountability Regime.
• Oversight of the implementation of the new insurance
accounting standard, AASB 17 Insurance Contracts
which was effective from 1 July 2023.
• Continue maturing our cybersecurity approach to
better enable Medibank to respond to the cyber threat
landscape, which continues to evolve rapidly.
• Continuing to embed our environmental, social and
governance (ESG) strategy, including accelerating our
pathway to Net Zero emissions by 2040 and preparing
for the forthcoming Australian Sustainability Reporting
Standards.
• Continuing to pursue enhanced Board performance,
and challenge the executive leadership team on the
progress and pace of agreed strategy execution.
• Oversight of the litigation and regulatory proceedings
relating to the 2022 cybercrime event.
• Oversight of Medibank's capital management policies
and level of capital.
Strategy and execution
• Review of strategy, including how we grow as a health
company and evaluation of opportunities to execute on
our strategic pillars and key objectives.
• Oversight of investments, partnerships and organic
growth initiatives to support execution of the strategy.
• Review and approval of the Corporate Plan, budget
and performance targets and oversight of business
performance against these targets.
• Monitoring the impacts of economic conditions and cost-
of-living pressures and overseeing Medibank's response.
People, remuneration and culture
• Oversight of Medibank’s 2030 Vision, values and culture.
• Oversight of the appointment of a new Group Lead –
Data & Technology and Group Lead – Amplar Health.
• Review of Board composition, including consideration
of succession planning and its continuing education.
• Oversight of our people frameworks, ensuring we
provide a safe environment for our people focused
on health and wellbeing and diversity and inclusion.
• Oversight of talent attraction, development and retention,
including succession planning for the executive leadership
team.
• Continued review of our remuneration framework and
reward governance practices following implementation
of APRA Prudential Standard CPS 511.
• Continued review of our consequence management
processes on variable remuneration outcomes.
Structure and composition of the Board
The Board comprises nine directors in total – eight non-executive
directors, including a non-executive Chair, and the CEO.
The Chair of the Board is responsible for providing leadership
to the Board and Medibank as a whole. The Chair’s other key
responsibilities are outlined in the Board Charter.
The current Chair is Mike Wilkins AO, an independent non-
executive director who has served as Chair since October
2020 and on the Board since May 2017. The current CEO is
David Koczkar, who commenced in the role in May 2021.
Biographies of the directors, including their skills, experience
and year of appointment, are set out on pages 31 to 33.
Details of directors’ attendance at Board and committee
meetings during the year ended 30 June 2024 are on page
53. The non-executive directors' tenure profile is shown
below. The length of service of the non-executive directors
ranges from six months to ten years and six months.
Non-executive director tenure profile
Independence
Directors are expected to bring an independent judgement
to bear on all Board decisions. A director is considered
independent if they are a non-executive director who is not
a member of management and are free of any business or
other relationship that could materially interfere with the
exercise of their unfettered and independent judgement or
could reasonably be perceived to do so.
Each director provides periodic updates of their interests,
positions, associations and relationships, and all directors
must keep the Board advised on an ongoing basis of any
interest that could potentially conflict with those of Medibank.
3-6 years
(1 directors)
> 3 years
(3 directors)
> 9 years
(2 directors)
> 6-9 years
(2 directors)
38 Medibank
Directors will be required to abstain from participating in
discussions or voting on any matters in which they have, or
may be perceived to have, a material personal interest.
The Board regularly assesses the independence of each
director in light of the interests disclosed. The Board
has assessed the interests, positions, associations and
relationships of each director. It has determined that all
non-executive directors are independent in accordance
with the principles outlined by the ASX Corporate
Governance Council and APRA and as set out in
Medibank’s Board Charter.
To provide an opportunity for independent discussion, the
non-executive directors meet without management present
at the commencement of each Board meeting.
Appointment and re-election of directors
Medibank’s Constitution provides that a director may be
appointed by the Board, and if so, is subject to election
by shareholders at the annual general meeting (AGM)
following their appointment if they wish to remain a director
(other than the CEO). Shareholders may also nominate
individuals to stand for election as a director at the AGM.
The Constitution requires an election of directors at each
AGM, and a director must retire and may stand for re-
election by the third AGM following the director’s election.
Gerard Dalbosco and Jay Weatherill AO will retire and offer
themselves for re-election and election, respectively, at the
upcoming AGM on 13 November 2024. Further information
about these directors is set out on pages 31 to 33, and in
the notice of annual general meeting.
Before appointing a person as a director, the Board
undertakes checks as to that person’s character, experience
and background, including criminal and bankruptcy checks.
Medibank has a Fit and Proper Policy that complies with APRA’s
Fit and Proper Prudential Standard. This standard requires that
a person in a position of responsibility, including a director,
be assessed prior to appointment (or in some cases, as soon
as possible after appointment) and on an ongoing basis as
to whether the person meets the fit and proper requirements.
The person must have the appropriate skills, experience and
knowledge to perform the role and act with the requisite
character, diligence, honesty, integrity and judgement.
Upon appointment, each non-executive director enters
into a service agreement setting out the terms of their
appointment. This includes the requirement to build a
shareholding in Medibank in order to align the interests of
non-executive directors with those of shareholders. With
effect from 1 July 2024, the Minimum Shareholding Policy
requires non-executive directors to acquire shares equal
in value to at least one year’s pre-tax base fee (excluding
committee fees) over a period of five years.
As part of the appointment process, Medibank enters into a
deed of indemnity, insurance and access with each director.
Each director is indemnified against liability in connection
with their role as a director and Medibank is required to
maintain a directors’ and officers’ insurance policy. The deed
also confirms and extends the director’s general law rights of
access to Board papers and other records of Medibank.
Director induction, continuing education and
access to information
The Board is committed to enhancing the capabilities of
each director and the performance of the Board generally.
Upon joining the Board, all new non-executive directors
undertake a tailored induction program. This includes
meetings with the Chair, CEO, ELT and senior leaders on
Medibank’s business, strategy and operation.
The Board is provided with ongoing professional
development opportunities during the year to maintain the
skills and knowledge needed to effectively perform their role.
This involves formal briefing sessions on a range of subjects
by key stakeholders, including regulators and industry
experts, to provide deeper insights on industry context
and trends. Subjects covered during the year included
generative AI, digital assets and crypto market updates
and the changing political environment. The program
also includes visits to Medibank’s retail stores, customer
engagement, conference attendance, and participation
in the management-led Executive Risk Committee and
Divisional Risk Committees. During the year, members of
the Board together with senior management also visited a
number of overseas companies in the health and life science
sectors to better understand potential growth opportunities
flowing from emerging health trends and patient care models
and to learn how Medibank might be able to strengthen its
operating model. The professional development program
is periodically reviewed by the Nomination Committee to
ensure it meets the needs of the directors.
The directors have complete and open access to the
CEO, executive leadership team and senior management
following consultation with the CEO. A director may,
following consultation with and consent from the Chair, seek
independent professional advice at Medibank’s expense in
respect of any matter connected with the discharge of the
director’s responsibilities. Directors also have direct access
to the advice and services of the Company Secretary, who
is directly accountable to the Board through the Chair and
advises the Board and the Chair on all governance matters.
Board skills, experience and diversity
The Nomination Committee regularly reviews the balance of
skills, experience, independence, knowledge and diversity
of the Board, and is committed to ensuring that the directors
collectively have the appropriate skills mix. The evolution
of the mix of skills and diversity of the Board is a long-
term process and must reflect the current and emerging
challenges for the organisation.
The Nomination Committee takes into account the
organisation’s strategic areas of focus, customer needs and
external environment, including stakeholder sentiment, and
assesses these various factors to ensure that an appropriate
balance of skills and diversity is achieved on the Board.
Corporate governance statement
Annual Report 2024 39
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
The skills and expertise that the Board has identified as
relevant to the performance of its role and the success of the
organisation, along with the collective strength of the Board
for each skill, are summarised in the Board skills matrix.
The very nature of diversity means that not all members of
the Board have all the skills listed below to the same degree.
However, the Board believes the current mix of expertise and
experience of members of the Board creates a diverse range
of views and perspectives, and results in the Board providing
effective governance, oversight and strategic leadership
for Medibank.
During the reporting period, the Nomination Committee
considered the mix of skills on the Board in the light of the
above considerations, and appointed Jay Weatherill AO
to the Board effective 18 March 2024. Jay has significant
experience and strengthens the Board's collective skills
and expertise.
Board skills matrix
Skills and experience
Collective strength1
Strategy
Experience in developing and implementing
organisational strategies, and appropriately
challenging management on delivery of strategic
objectives
Financial acumen and capital management
Strong financial acumen and proficiency in
corporate finance and internal financial controls
and/or experience in overseeing corporate funding,
capital management and investments
Corporate transactions and major projects
Experience in overseeing complex business
transactions and major projects, including mergers
and acquisitions (and integration of those acquisitions)
Risk and compliance management
Experience in establishing risk and compliance
management frameworks, setting the risk appetite,
and overseeing organisational risk culture
Governance
Experience in establishing and overseeing
operations in a complex regulated environment,
and demonstrated commitment to the highest
governance standards
Insurance and healthcare industry experience
Experience in the insurance and/or healthcare
industry
Customer
Experience in developing product and/or
customer management strategies, marketing
and/or digitised customer initiatives
People and culture
Understanding the link between strategy,
culture, performance, long-term shareholder
value creation and remuneration outcomes
Government relations and public policy
Interacting with government and/or regulators
and/or involvement in public policy decisions
40 Medibank
Skills and experience
Collective strength1
Technology, data and digital innovation
Understanding technology and innovation,
including data management, data privacy and
information security practices. Experience with
businesses that have developed and implemented
technology based initiatives to enhance
productivity and/or customer experiences.
Environment and social
Understanding and identifying potential
risks and opportunities from an environment
(including climate change) and social perspective.
1. This represents the collective strength of the Board including David Koczkar, CEO.
Board performance evaluation
The Nomination Committee is responsible for reporting
on the evaluation of the performance of the Chair, Board,
committees and individual directors to the Board. The
evaluation is conducted annually either through an internal
review process or an external process. In 2024, the Board
implemented an independent external review of the
performance of the Board, committees and non-executive
directors (including the Chair). The evaluation was primarily
conducted through a questionnaire and in-depth one-on-
one interviews with the directors and selected ELT members.
The Board discussed the external consultancy’s report and
recommendations and identified a number of opportunities
to enhance its efficiency and effectiveness, including further
opportunities to improve the Board’s operating rhythm and
continuing to focus on Board renewal and diversity as part
of director succession planning.
The Chair continues to be responsible for the assessment
of each individual non-executive director’s performance
and contribution. The Chair met with each of the non-
executive directors in 2024 to review their performance
and professional development needs.
Committees of the Board
The Board has established five standing committees to
assist in the execution of its responsibilities – the Audit
Committee, Risk Management Committee, Investment and
Capital Committee, People and Remuneration Committee
and Nomination Committee. Each committee is governed
by a charter setting out the committee’s role, responsibilities,
membership and processes. The membership, roles and
responsibilities of each committee are summarised in the
table below. The charters can be accessed on our website.
In addition, the directors attended Board strategy sessions
and special purpose committees, including in relation to
financial reporting, the 2022 cybercrime event, Medibank
Uplift Program and other matters.
The relevant qualifications and experience of the members
of each standing committee can be found in the director
biographies on pages 31 to 33. The number of meetings
of each committee, and the individual attendance of
their members, are provided on page 53.
Committee membership
as at 22 August 2024
Composition
Key roles and responsibilities
Audit Committee
• Gerard Dalbosco
(Chair)
• David Fagan
• Kathryn Fagg
• Jay Weatherill
• At least three members, all of whom
are non-executive directors, a majority
of whom are independent directors
and at least one of whom is a member
of the Risk Management Committee.
• Structured so that members are all
financially literate, and between
them have accounting and financial
expertise and experience and an
understanding of Medibank’s industries.
• The chair must be an independent non-
executive director and must not be the
chair of the Board (but the chair of the
Board may sit on the committee).
• Overseeing and reviewing the integrity of external
financial reporting and financial statements.
• Endorsing and recommending the appointment and
removal of, and reviewing the terms of engagement,
performance and independence of external auditors.
• Reviewing management processes for compliance
with relevant laws, regulations and other accounting,
tax and external reporting requirements.
• Overseeing and reviewing internal and external audit
processes and internal control framework.
Corporate governance statement
Moderate
Strong
Very Strong
Moderate
Strong
Very Strong
Annual Report 2024 41
Committee membership
as at 22 August 2024
Composition
Key roles and responsibilities
Risk Management
Committee
• David Fagan
(Chair)
• Tracey Batten
• Gerard Dalbosco
• Linda Bardo
Nicholls
• Jay Weatherill
• At least three members, all of whom
are non-executive directors, a majority
of whom are independent directors
and at least one of whom is a member
of the Audit Committee.
• Structured to have the necessary
knowledge and a sufficient
understanding of Medibank’s
industries.
• The chair must be an independent
non-executive director appointed
by the Board and must not be the
chair of the Board (but the chair of
the Board may sit on the committee).
• Approving and recommending to the Board
the adoption of policies and procedures on risk
oversight and management to ensure effective risk
management systems are in place.
• Ensuring that Medibank has in place a robust risk
management framework and procedure to support
the effective identification and management of risks.
• Evaluating the adequacy and effectiveness of the
management and reporting and control systems
associated with material risks.
• Establishment and monitoring of Medibank’s overall
risk appetite.
• Monitoring and review of Medibank's risk culture.
• Oversight of, and monitoring progress against,
Medibank's sustainability strategy.
• Oversight and prior endorsement of the
appointment and replacement of the Chief Risk
Officer and reviewing their performance and
setting their objectives.
Investment
and Capital
Committee
• Linda Bardo
Nicholls (Chair)
• Mike Wilkins
• Peter Everingham
• At least three members, all of whom
are non-executive directors.
• The chair must be an independent
non-executive director, appointed
by the Board.
• Assisting and advising the Board on capital and
investment related matters.
• Overseeing and monitoring the effectiveness of the
investment strategy and Capital Management Policy.
• Monitoring and reviewing the effectiveness of the
investment process.
• Authorising delegated investment decisions.
People and
Remuneration
Committee
• Tracey Batten
(Chair)
• Peter Everingham
• Kathryn Fagg
• Mike Wilkins
• At least three members, all of whom
are non-executive directors, a majority
of whom are independent directors
and at least one of whom is a member
of the Risk Management Committee.
• The chair must be an independent
non-executive director, appointed
by the Board.
• Reviewing and overseeing key people and
organisational culture strategies, including employee
engagement, values and behaviours.
• Reviewing and making recommendations to the
Board on the remuneration framework, policy and
arrangements for the non-executive directors, CEO,
ELT and certain nominated personnel.
• Reviewing executive succession planning, talent
management, industrial relations and diversity
strategies.
• Reviewing and overseeing key incentive schemes and
equity incentive plans.
• Recommending to the Board the measurable
objectives for diversity.
• Reviewing and monitoring Medibank’s health, safety
and wellbeing strategy and performance.
Nomination
Committee
• Mike Wilkins (Chair)
• Tracey Batten
• Gerard Dalbosco
• David Fagan
• Linda Bardo
Nicholls
• At least three members, comprising
the chair of the Board and the chair
of each standing Board committee
(unless the Board resolves otherwise).
• All members of the committee must
be independent directors.
• The chair of the Board will be the
chair of the committee.
• Director selection and appointment.
• Director induction and professional development.
• Board composition.
• Board succession planning and renewal.
• Performance evaluation of the Board, committees
and individual directors.
42 Medibank
Executive leadership team
The CEO, supported by the executive leadership team
(ELT), is responsible for the day-to-day management and
performance of Medibank. ELT members have a clear
understanding of their roles and responsibilities through
position descriptions and a structured performance
management system. Profiles and accountabilities for
ELT members are set out on pages 34 to 35 . Each ELT
member has entered into a service agreement with
Medibank which sets out the terms of their employment.
Remuneration policies and practices applying to the ELT
are detailed in the remuneration report from page 55.
The remuneration report from page 55 contains the
performance measures applied to Executive KMP members
and the process for the annual evaluation of their performance.
The same process is also undertaken for the annual
performance of each other ELT member. A performance
evaluation was undertaken during 2024 in accordance with
that process for each ELT member in that role at 30 June 2024.
Values and ethical standards
Central to the Board’s governance framework is a culture
of integrity and ethical behaviour based on Medibank’s
key values: Customer Obsessed; Show Heart; Brilliance
Together; and Break Boundaries. These values are intended
to guide the way employees work together and engage
with customers, business partners, governments and the
wider community, and are supported by a range of policies
and procedures. Our values are further articulated on our
website and in the Sustainability Report 2024.
Key policies
Details of key policies supporting our commitment to integrity and ethical behaviour are set out below.
Copies of each policy can be found on our website.
Purpose
Key provisions
Breaches and reporting
Code of
Conduct1
Medibank employees are
required to conduct their
activities ethically and
with integrity. The Code of
Conduct sets out the ethical
standards that are expected
of all directors, people
leaders, employees and
contractors in their dealings
with customers, suppliers
and each other.
Requires directors, people leaders,
employees and contractors to behave
with high standards of personal integrity,
and in a manner that:
• complies with applicable laws, standards
and internal policies;
• promotes health, safety and wellbeing;
• fosters relationships of trust,
accountability and transparency;
• avoids conflicts of interest (incIuding
not offering or accepting inducements,
secret commissions or bribes); and
• respects privacy and protects
confidential information.
Sets out different approaches
to dealing with breaches
of the Code, depending
on the circumstances –
including raising concerns
with immediate or senior
managers, the People,
Spaces & Sustainability
team, the CEO, or via the
Whistleblower Policy.
Breaches of the Code of
Conduct are reported to the
People and Remuneration
Committee.
Whistle
-blower
Policy1
Medibank is committed to a
culture where our people are
encouraged to speak up if
something doesn’t look right,
and to support them when
they do. The Whistleblower
Policy establishes what is
reportable conduct, how to
contact Medibank Alert, and
the protections available to
whistleblowers.
Sets out the types of conduct that can
be disclosed, who may make a disclosure
under the policy and what to include in a
report.
Sets out support and protection available
to whistleblowers, and the processes
for managing whistleblower complaints
(including key roles and responsibilities).
Provides details of the
Medibank Alert whistleblower
service, which is available
through an external provider,
enabling whistleblowers
to report anonymously or
limit who is informed of their
identity.
Material incidents reported
under the policy are reported
to the Risk Management
Committee.
Corporate governance statement
Annual Report 2024 43
Purpose
Key provisions
Breaches and reporting
Anti-Bribery
and
Corruption
Policy1
Medibank has zero tolerance
for bribery and corruption.
The Anti-Bribery and
Corruption Policy describes
conduct that is prohibited
for directors, employees
and contractors when
conducting business on
behalf of Medibank, and
how breaches can be
reported.
Requires that employees and contractors:
• not offer, pay or accept inducements,
bribes, kickbacks, secret commissions
or improper payments, or engage in
corrupt business practices;
• not accept gifts, hospitality or
anything of value which may have
obligations attached;
• not offer or give anything of value, or
solicit any inducement, that may conflict
with their work or duties to Medibank; and
• ensure approved grants and donations
are appropriately recorded.
Requires requests for bribes
or facilitation payments to
be reported to the Chief
Risk Officer.
Requires other breaches or
potential breaches to be
reported to the Chief Risk
Officer or the Whistleblower
Hotline.
Breaches of the policy
are reported to the Risk
Management Committee.
Share
Trading
Policy
The Share Trading Policy
describes restrictions on
buying and selling Medibank
shares for the Board, the ELT,
senior executives and other
Medibank employees.
Prohibits directors, executives, employees
and their associates from dealing in
Medibank or other securities if they
possess inside information.
Prohibits directors, executives, certain
restricted employees and their associates
from:
• dealing in Medibank securities during
blackout periods, which apply in the
lead-up to the release of financial results
and at other times as required; and
• entering into transactions which could
have the effect of limiting their exposure
to the economic risks relating to their
participation (if any) in Medibank’s
equity-based remuneration schemes.
Details the penalties for
breaches of insider trading
laws and the consequences
as a director or employee
for a breach of law and
the policy.
1. This code or policy applies to Medibank Private Limited and its wholly owned subsidiaries.
Ethical conduct is also supported by a range of other
corporate policies, including in the areas of health, safety
and wellbeing and modern slavery. Copies of these policies
are also available on our website.
The Health, Safety and Wellbeing Policy underpins our
objective of preventing injury and illness and inspiring our
people to eat, move and feel good in a way that works for
them. Medibank has a health and safety management
system in place to ensure it meets legislative requirements
and proactively addresses its key risks in health and safety.
Diversity and inclusion
We're committed to creating an inclusive culture that
acknowledges and embraces difference in all its forms
and ensures that every voice is heard. We value the
differences each of our employees bring to our business
and the benefits this delivers to our customers, employees,
shareholders and the community.
The Board has adopted a Diversity and Inclusion Policy
that facilitates an inclusive culture and supports us to
deliver an inclusive health and wellbeing experience for
our community.
It outlines the role of the People and Remuneration
Committee in recommending to the Board measurable
objectives for diversity and annually assessing progress
against these. The policy is reviewed annually and is
available on our website. A Diversity and Inclusion Strategy
supports the policy and sets out the measurable objectives
established by the Board.
The Board emphasises the importance of having a gender
diverse leadership team and aims to maintain 40%
women representation in the Group and senior executive
population and on our Board. As at 30 June 2024, the
actual representation across the Group and senior
executive population was 46%. A Board member change
in March 2024 meant for the first time in many years, our
representation of women directors fell to 33%.
In May 2024, we reported our gender equality indicators
under the Workplace Gender Equality Act 2012 (Cth) and
also published an employer statement in response to the
public disclosure of WGEA pay gaps. The reports can be
accessed on our website.
44 Medibank
Corporate governance statement
As at 30 June 2024, the respective proportions of men and women on the Board, in senior executive positions and across
Medibank were as follows:
Position1
Women
Men
Other
% Women
Board (including CEO)
3
6
0
33%
Group Leads (including CEO)2
4
5
0
44%
Senior executives3
26
30
0
46%
Group and senior executive total
30
35
0
46%
Senior managers
107
120
1
47%
Other managers
454
372
3
55%
Non-managers
1,870
562
6
77%
Overall (including Board)
2,464
1,094
10
69%
1. This table only applies to positions in Medibank Private Limited and its wholly owned subsidiaries.
2. Group Leads refer to the CEO and the executive leadership team (ELT) as at 30 June 2024. All of the ELT report directly to the CEO.
3. Senior executive positions include all roles classified as hub leads as part of Medibank’s broad based banding framework.
Last year the Board set measurable objectives for achieving diversity at Medibank, including gender diversity, and
committed to reporting progress against these in the 2024 corporate governance statement.
The table1 below shows our progress against these 2024 objectives and our objectives for 2025 that have now been set
by the Board.
FY24 measurable objective
Progress towards achievement
FY25 measurable objective
Medibank will remain committed to
ensuring a representation of at least
40% women across our executive
leadership and senior leadership
populations, and at least 40%
women on the Medibank Board.
As at 30 June 2024, women represented:
• 46% of Group and senior executive
roles (compared to 48% in FY23)
• 33% of the Medibank Board, including
the CEO (compared to 44% in FY23).
Aim to maintain representation of:
• 40% women across our
executive leadership and
senior leadership populations
• 40% of women on the
Medibank Board.
Medibank will aim to improve the gender
balance across our manager and non-
manager population by maintaining at
least 40% women across our manager
workforce and improving the
representation of men in
our non-manager workforce.
As at 30 June 2024 women represented:
• 53% of all manager roles, excluding
Group and senior executives
(compared to 53% in FY23)
• 77% of non-manager positions
(compared to 79% in FY23).
Aim to maintain representation of:
• 40% women across our
manager workforce
• 40% women across our
non-manager workforce.
Medibank will continue to focus on
increasing the representation and
engagement of Aboriginal and
Torres Strait Islander employees
with a target set of at least
49 employees (approx. 1.8% of
survey respondents) as
self-reported in our annual
engagement survey.
As at 30 June 2024:
• 33 employees (1.2% of survey
respondents2) identified as Aboriginal
and Torres Strait Islander compared
to 25 people in FY23 (0.9% of survey
respondents3)
• Engagement for this cohort was 7.8
(compared to 8.1 in FY23 and the
Medibank average of 7.9).
Aim to increase the representation
and engagement of Aboriginal
and Torres Strait Islander
employees to 49 employees
(approx. 1.8% of survey
respondents) as self-reported in
our annual engagement survey.
Medibank will continue to focus on
increasing the representation and
engagement of employees with
disability with a target set of at
least 192 employees (approx. 7%
of survey respondents) as self
-reported in our annual
engagement survey.
As at 30 June 2024:
• 175 employees (6.6% of survey
respondents2) identified as having a
disability compared to 163 people in
FY23 (5.9% of survey respondents3)
• Engagement for this cohort was 7.9
(compared to 7.7 in FY23 and the
Medibank average of 7.9).
Aim to increase the representation
and engagement of employees
with disability to 192 employees
(approx. 7% of survey respondents)
as self-reported in our annual
engagement survey.
1. The measurable objectives and progress towards achievement only relate to Medibank Private Limited and its wholly owned subsidiaries.
2. Based on employee engagement survey response rate of 79% from 3,371 employees invited to participate.
3. Based on FY23 employee engagement survey response rate of 80% from 3,452 employees invited to participate.
Annual Report 2024 45
Market and shareholder communication
Market disclosure
We promote investor confidence and the rights of
shareholders by ensuring the immediate disclosure of market
sensitive information regarding Medibank. The measures
to further these commitments are detailed in the Disclosure
and Communication Policy approved by the Board, which is
available on our website.
This policy is designed to facilitate compliance with
Medibank’s obligations under the ASX Listing Rules and
the Corporations Act 2001 (Cth) by assigning authorisation
processes for market announcements and reserving
certain matters for approval by the Board. The policy also
requires the Board to receive copies of all material market
announcements promptly after they have been made.
Processes for engagement with analysts and investors
are detailed in the policy as well as the assignment of
spokespersons for market and media communications.
Awareness and compliance is promoted by compulsory
periodic online employee training and additional information
sessions for those likely to become aware of potentially
market sensitive information.
The Board is supported by a management Disclosure
Committee responsible for considering potentially market
sensitive information and monitoring Medibank’s disclosure
processes and reporting framework. The Disclosure
Committee Charter is available within the Disclosure
and Communication Policy.
Medibank’s full year financial reports are audited, and
our half year financial reports reviewed, by our external
auditor. For other periodic Medibank corporate reports,
such as the annual report and sustainability report, relevant
subject matter experts confirm the factual accuracy of
relevant statements; final reports are also reviewed by senior
executives who have the knowledge and skills to verify the
accuracy of the information. Periodic corporate reports are
reviewed and where appropriate, approved by the Board
prior to publication.
Information about Medibank and its governance
Our website provides information about Medibank and its
corporate governance, and an investor centre that provides
information specifically for prospective and existing
Medibank shareholders which links to our results, investor
presentations, annual reports, sustainability reports, share
price, ASX announcements and AGM materials. We also
maintain a shareholder calendar of upcoming events within
the investor centre, along with information to assist investors
in managing their shareholdings. Medibank’s share register
is managed by Computershare Investor Services Pty
Limited (Computershare) which provides an accessible
online platform for shareholders to access and manage
their shareholdings.
We encourage shareholders to receive communications
securely by email for reasons of speed, security,
environmental friendliness and cost reductions.
Unless a shareholder elects to receive information by post,
Medibank and through its share registry, Computershare,
communicate with shareholders via email and other
electronic channels, including providing notices of meetings
and facilitating online voting on the AGM resolutions.
Investor engagement
We conduct briefings, meetings, telephone calls and
webcasts for institutional and retail investors, analysts
and proxy advisors to provide a greater understanding of
the business, our strategy and results, providing a forum
for two-way communications between Medibank and the
investment community. During the year, we participated in
the Macquarie Australia Conference in May 2024.
We generally communicate with the investment community
through the CEO, the Group Lead – CFO & Group Strategy
(CFO), other members of the ELT and the Hub Lead –
Investor Relations. We also communicate through the Chair
for governance issues, and the Chair of the People and
Remuneration Committee for remuneration issues and the
Company Secretary and Group Lead – People, Spaces &
Sustainability for environmental, social and governance
issues. Feedback from engagement with the investor
community is communicated to the Board at each
Board meeting.
In all communications with investors, analysts and media,
only publicly available information and information that
is not market sensitive is discussed. In order to ensure that
all shareholders have equal and timely access to material
information concerning Medibank, advance notification of
investor and analyst financial results briefings is announced
via the ASX. The briefing materials are released first via
the ASX and then on the investor centre section of our
website, together with a recording of the half and full year
results briefing. We also release the materials for new and
substantive investor and analyst presentations to the ASX
before the presentation starts.
Shareholder meetings
The Board encourages shareholders to attend the AGM and
to take the opportunity to ask questions. In 2024, investors
will be able to attend the meeting in person at an accessible
venue in Melbourne, or virtually, with the ability to vote and
ask questions at the venue or online; the meeting will also
be webcast live and made available on our website. All
substantive resolutions at the meeting are decided by a
poll and not by a show of hands.
The external auditor attends the AGM and is available at the
meeting to answer questions relevant to the auditor’s report.
We provide shareholders with a clear and concise notice
of meeting, setting out the business to be considered,
including all material information relevant to the election
or re-election of directors. These materials, together with
the presentations at the AGM and the voting results, are
released to the ASX and then made available on our website.
46 Medibank
Corporate governance statement
Integrity of financial reporting
The Board has a strong commitment to the integrity and
quality of its financial reporting and its systems for risk
management, compliance and internal control.
The role of the Audit Committee is to provide an objective,
non-executive review of the effectiveness of Medibank’s
internal control, financial reporting and risk management
framework, to assist the Board in carrying out its accounting,
auditing, and financial reporting responsibilities. Details of
the composition and key roles and responsibilities of the
Audit Committee are set out on page 40. In addition to the
members of the Audit Committee, any director may attend
Audit Committee meetings. Representatives of management
and the Hub Lead – Internal Audit may attend Audit
Committee meetings by standing invitation, and the Chief
Actuary and external auditors are invited as required.
Financial reporting assurances
The preparation of the full year and half year financial
statements is subject to a detailed process of review and
approval by the Board supported by the Audit Committee.
As required under section 295A of the Corporations Act
2001 (Cth), the Board receives a declaration from the CEO
and the CFO that, in their opionion, the financial records of
the company have been properly maintained and that the
financial statements and notes comply with accounting
standards and give a true and fair view of the consolidated
entity’s financial position and performance for the financial
period. This includes a written declaration that their
opinion has been formed on the basis of a sound system
of risk management and internal control which is
operating effectively.
This declaration was received by the Board prior to
approving the financial statements for the half year ended
31 December 2023 and the full year ended 30 June 2024.
Internal audit
Medibank has an internal audit function that provides the
Board and Audit Committee with an independent evaluation
of the adequacy and the effectiveness of Medibank’s
financial and risk management framework. The Internal
Audit Plan, which is approved by the Audit Committee, is
developed using a risk-based approach and is driven by
Medibank’s strategy, risk profile and assurance priorities.
The Internal Audit Charter provides the internal audit
team unrestricted access to review all activities of the
business. The internal audit function is supplemented
by the engagement of external subject matter experts
when required.
The head of the internal audit function is the Hub Lead–
Internal Audit. To ensure the independence of the internal
audit function, the role reports directly to the Audit
Committee Chair, with a direct communication line to the
CEO and administrative reporting line to the CFO. The Hub
Lead–Internal Audit (in addition to their standing invitation
to attend Audit Committee meetings) reports to each Audit
Committee meeting on progress against the Internal Audit
Plan, audit findings and recommendations, business insights
and the status of management actions.
Risk management
Information about Medibank's risk governance (page
47), risk management framework (page 48) and material
business risks, including environmental, social and
governance risks and emerging risks (page 49), can
be found in the following risk management section.
This corporate governance statement is accurate and
up to date as at 22 August 2024 and has been approved
by the Board.
Annual Report 2024 47
Risk management
Our approach to risk management reflects our commitment
to ethical and responsible business practices and guides
the work we are doing to deliver on our 2030 vision of the
best health and wellbeing for Australia.
Our risk management approach is defined within our risk
management strategy and underpinned by our enterprise
risk management framework, which encompasses the
systems, structures, policies, processes and people that
manage risks across the business. These align with the
requirements of the Australian Prudential Regulation
Authority’s (APRA) Consolidated Prudential Standard 220
Risk Management (CPS 220).
We undertake an annual strategic planning process to
establish and agree upon our strategic objectives with
the Board and develop our risk appetite statement,
corporate plan and capital management plan.
Risk governance
The Board has overall responsibility for Medibank’s risk
management framework including setting the risk appetite
for Medibank. The Board reviews the risk management
strategy and risk appetite statements on an annual basis
and satisfies itself that management has developed and
implemented a sound system of risk management and
internal control to effectively manage risk across the
business in line with regulatory and statutory requirements.
The Risk Management Committee assists the Board in
overseeing the implementation of the risk management
framework. Committee members are appointed based
on their qualifications and experience to ensure that the
committee can adequately discharge its duties. More
information about the committee and its members can be
found in the corporate governance statement on page 41.
Risk management plays an important role in remuneration
outcomes. For an incentive award to be made to any
employee, a risk, compliance and behaviour gateway
must be met. As well all employees have risk-related
key performance measures incorporated into their
performance scorecard under the company-wide ‘I Perform
Better’ performance framework. More information on the
relationship between risk and remuneration can be found in
the remuneration report on page 62.
The Board is also assisted by the Investment and Capital
Committee, Audit Committee and People and Remuneration
Committee. These committees oversee the implementation
and monitoring of the investment strategy and ICAAP
Summary Statement Policy (including monitoring the
effectiveness of the investment process which aims to
achieve optimum return relative to Medibank’s risk appetite),
the annual audit plan and tracking and closure of actions
that arise, and operational health and safety, people and
remuneration risk, respectively.
The Executive Risk Committee and divisional risk committees
are management committees that assist the CEO with
the oversight of risk management activities across the
business to ensure material risks are managed in line with
the approach defined in the risk management strategy and
the risk appetite set by the Board. There are seven divisional
risk committees covering key business units — Amplar Health,
Customer, Digital & Ventures, Data & Technology, Finance
& Strategy, Trust, Legal & Company Secretariat and People,
Spaces & Sustainability.
Medibank has adopted a three lines of defence approach
to define risk management roles, responsibilities and
accountability:
• First line: Management is accountable for identifying,
assessing, monitoring and managing material risks in
the business. They are responsible for decision making
and the execution of business activities, whilst managing
risk to ensure it is in line with the Board’s risk appetite
and strategy.
• Second line: The Group risk and compliance functions
provide objective advice and challenge to the first line
on risk and control activities and provide assurance
and guidance on the design and implementation of
appropriate risk management activities.
• Third line: The internal audit function provides
independent assurance to the Audit Committee and
the Board on the adequacy and effectiveness of the risk
management framework, financial reporting processes
and internal control and compliance systems operating
in the first and second line.
In July 2024, we announced the role of Chief Risk &
Compliance Officer would join our senior leadership
team and report directly to the CEO. We also brought
together our current risk and compliance teams as well
as the Medibank Uplift Program, to form a new Risk
and Compliance business group. This function will also
manage our financial accountability regime and CPS 230
programs and has accountability for our risk management
relationship with APRA.
48 Medibank
Risk management
Medibank Board
Group strategy, risk management strategy, risk appetite and profile
Board Risk
Management
Committee
Board
Investment
and Capital
Committee
Board
Nomination
Committee
Board
People and
Remuneration
Committee
Board
Audit
Committee
Executive Risk Committee
Divisional risk committees
Business unit teams
Material risks
Strategic
Mandatory
Strategic including:
• Strategic planning & enablement
• Customer growth
• Information security
• Portfolio management & optimisation
• Healthcare cost and utilisation
• Health growth
• Clinical
• Stakeholder risk
Operational
(including
regulatory
compliance)
Credit
Capital &
liquidity
Market &
investment
Insurance
Emerging (including ESG risks)
risks we are monitoring that could have the
potential to become material risks in the future
Climate risk
Heightened cyber risk
associated with the
geopolitical environment
Artificial
intelligence
Macro and
socio-economic /
cost of living
3 lines of defence
1st line – risk ownership 2nd line – oversight and compliance 3rd line – independent assurance
Independent
assurance
Internal
audit
Independent
assurance
External
audit
(as required by
the Board to
meet regulatory
obligations)
Risk behaviours
Risk culture
Risk management framework
Our risk management framework guides risk management
activities across the business to effectively identify, assess,
manage, monitor and report risks. The framework is
implemented through the three lines of defence model and
its effectiveness is assessed by the internal audit function
on an annual basis with a full comprehensive review on a
three yearly basis in accordance with the Risk Management
Committee Charter and APRA Prudential Standard CPS 220.
A key component of our risk management framework is
the definition of Medibank’s risk appetite by the Board
which informs management's decision-making process.
The annual review, and the comprehensive review (every
three years) of the framework consider whether the
framework is sound, and Medibank is operating with due
regard to the risk appetite set by the Board. The Risk
Management Committee reviews the risk management
framework at least yearly and regularly monitors the
framework’s effectiveness. The annual review of the
framework was completed during FY24 and the three
yearly comprehensive review will be completed in late
2024. Medibank continues to operate and strengthen
enterprise risk management practices in alignment
with the requirements outlined in the APRA Prudential
Standard CPS 220 – Risk Management.
Annual Report 2024 49
Material business risk
Mitigations
Material
sustainability
categories
Strategic
The risk that we are
unable to identify
and execute the right
strategic initiatives and
projects on target and
on time that deliver
measurable and agreed
outcomes to support our goals
Medibank’s strategic risks are identified and assessed as part
of our annual strategic planning process and endorsed by the
Board. Key strategic risks identified include loss of private health
insurance customers, healthcare costs and utilisation and execution
of non-private health insurance growth. These risks influence the
prioritisation of investments and resources in the Corporate Plan,
which is approved by the Board. To effectively understand and assess
some key strategic risks that are broad in nature (e.g. customer risks),
we undertake detailed analysis on threats or opportunities that
specific scenarios may pose to our business.
Customer health
Community health
Operational
(including regulatory
compliance)
The risk of financial loss
resulting from inadequate
or failed internal processes,
people and systems or from
external events
We have established risk management policies and procedures for
identifying, assessing, monitoring and reporting operational risks and
controls. This includes the important areas of information security,
technology, business continuity, outsourcing, fraud, people, and health
and safety risks. We have established compliance management
policies and procedures for identifying and managing regulatory
obligations and incidents that may arise. Management of operational
risk is overseen by divisional risk committees, the Executive Risk
Committee and the Board’s Risk Management Committee.
Employee health
Environmental
health
Governance
Credit
The risk of financial loss
due to counterparties
failing to meet all or part
of their contractual obligations
Exposure to this risk is primarily through Medibank’s investment
portfolio. This risk is managed through the application of the Investment
Management Policy. The effective implementation of this policy is
overseen by the Board’s Investment and Capital Committee to ensure
that credit risk is managed in line with the risk appetite set by the Board.
Governance
Capital &
liquidity
The risk of not being able
to meet financial commitments
as and when they are due
and in complying with APRA’s
prudential standards
Medibank has Board-approved policies for capital management
(ICAAP) and liquidity management designed to ensure it meets or
exceeds regulatory capital requirements at all times, and is able to
fund all payments as and when they fall due, as well as under adverse
stress scenarios. Liquidity risk is managed by our treasury function
through daily cash management of cash flows and liquid asset
positions and projected future cash flows under current and adverse
scenarios. The ICAAP (Internal Capital Adequacy Assessment
Process) also includes actions that can be taken to support
Medibank’s capital position under various stress scenarios.
Governance
Market &
investment
The risk of adverse
financial impact market factors
e.g. foreign exchange rates,
interest rates and equity prices
We have a Board-approved Investment Management Policy. The
Board’s Investment and Capital Committee oversees the investment
process and compliance with investment mandates, performance
against benchmarks and asset allocation. Our strategic asset
allocation is weighted largely towards defensive assets and with
limits applied to illiquid assets.
Governance
Customer
health
Employee
health
Community
health
Environmental
health
Governance
Material business risks
Material business risks are those risks deemed to have a significant impact on Medibank’s operations, financial prospects and
business objectives. Emerging risks are those we are monitoring that could have the potential to become material risks in the future.
50 Medibank
Material business risk
Mitigations
Material
sustainability
categories
Insurance
The risk of misestimation
of incurred and expected
costs, frequency and
severity of insured events
The Board approves the Pricing Policy, which includes pricing
and profitability objectives and forms a key part of the Capital
Management Plan. Our objective is to support customer growth
through balancing the offer of competitive value to all customers with
profitability objectives and the need to meet capital management and
regulatory requirements. Insurance risk is a key part of regular portfolio
monitoring and treatment plans are formulated and implemented in
response to any potential for deviation from target measures.
Governance
Clinical
The risk of unexpected,
adverse clinical outcomes
from a health service
provided by Medibank,
or a third party acting
on behalf of Medibank
Clinical risk arises from clinical services that Medibank provides and
procures, the provision of health-related information, and customer
health initiatives. We have implemented a clinical governance and
quality management framework that defines the principles, structures
and processes that underpin service quality, continuous improvement
and patient safety. Our Chief Medical Officer, supported by a clinical
governance team, provides oversight and assurance. The Risk
Management Committee and Board receive regular reporting on
the performance of clinical risk management.
Customer health
Community health
Emerging risk
(including ESG risks)
Emerging risks
Material
sustainability
categories
• Climate risk
• Heightened cyber risk associated with the geo-political environment
• Artificial Intelligence
• Macro and socio-economic / cost-of-living
Employee health
Environmental
health
Governance
Customer
health
Employee
health
Community
health
Environmental
health
Governance
Environmental, social and governance risks
Medibank’s risk management framework also applies to the
environment, social and governance (ESG) risks (including
climate risk). Medibank commissioned an independent
external review in 2021 to assess our exposures to climate
change risks in line with the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD).
The review did not identify material exposures at this time
for Medibank; however, the outcomes of the review, and
Medibank’s response, have been reported on pages 63
to 73 of the Sustainability Report 2024. Further detail on
our approach to sustainability and ESG issues can also
be found in the Sustainability Report 2024.
The evolving cyber threat landscape
We continue to monitor and respond to the ongoing risk
of cybercrime. Our uplift program is designed to continue
maturing our cybersecurity approach and better enable us
to respond to the cyber threat landscape, which continues
to evolve rapidly. It encompasses technology and IT security,
risk culture and capability and is focused around 4 key
areas;
• Ongoing enhancement of our security detection and
response capabilities
• Further strengthening our core cybersecurity services
• Continuing to mature our risk management culture and
practices
• Assessing our capability maturity pursuant to the National
Institute of Standards and Technology’s (NIST) cyber security
framework
Find more information about our approach to data security
and privacy in our Sustainability Report 2024.
Risk management
Annual Report 2024 51
APRA CPS 230 Operational Risk Management
Medibank is implementing the requirements for APRA’s
new prudential standard CPS 230 Operational Risk
Management. The standard aims to ensure resilience to
operational risks and disruptions and comes into effect
from 1 July 2025. It defines requirements for operational
risk and absorbs existing standards for business continuity
(CPS 231) and outsourcing (CPS 232).
Risk culture
Medibank is committed to maintaining a strong risk
culture. Our values are integral to the way we consider
risk in the pursuit of our strategic objectives and customer-
focused outcomes. We acknowledge and recognise the
importance of doing the right thing for our customers,
our people, and the community, and this commitment
is reflected in our purpose and values.
Our risk culture framework is an integral part of our
approach to risk management and brings together the
key elements that influence and shape our risk culture
in terms of behaviours and practices. It clearly highlights
the behaviours we expect of our people and the
practical application of the framework.
The framework builds upon the foundation of our Code of
Conduct, which sets out the way we work at Medibank via
the establishment of standards of behaviour and conduct
expected from all directors, employees and contractors.
The Code of Conduct not only emphasises the importance
of compliance with legal obligations, it also clearly outlines
our responsibility toward our employees, our customers,
and the wider community. In adhering to these principles,
we strive to create a culture that goes beyond mere
compliance, to one that fosters a genuine commitment to
ethical decision making and responsible practices.
When it comes to risk culture, we aim to:
• Role model our organisational values and support others
to do the same. This includes positive behaviours around
managing risk to deliver the right outcomes for our
shareholders, employees, customers and the community.
• Encourage transparency and speaking up to provide
opportunities to understand where we can improve,
especially for our customers.
• Foster a culture of continuous improvement in managing
risks. Make it part of our DNA to strive for great outcomes,
especially for our customers.
Openness to consider
diverse viewpoints and
to provide constructive
challenge and feedback
across the organisation
Risk issues are openly
communicated across the
organisation and supported
by an environment where
people feel safe to speak up
Level of skills and training, processes,
systems and data across the three lines
of defence to support effective risk
management practices and behaviours
Medibank risk culture framework
The following highlights the behaviours we expect of our people and the practical application of the framework:
Leaders at all levels championing
risk management, setting a clear
tone and role modelling
appropriate risk behaviours
(tone from the top and
tone from the middle)
Business and strategic
decisions align with the
risk appetite statement
There is effective oversight
of risk and risk culture,
and risk management is
supported by appropriate
frameworks, policies,
controls and reporting
Responsibility and
accountabilities of risk are
clearly defined, understood
and discharged across the
organisation (particularly the
three lines of defence)
Good risk management behaviour
is encouraged and rewarded,
and poor risk behaviour has
proportionate consequences
Risk governance
and oversight
Alignment
with purpose
and values
Decision
making and
challenge
Communication
and escalation
Knowledge
and capabilities
Performance
management
and incentives
Responsibility
and
accountability
Leadership
Risk appetite
and strategy
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52 Medibank
Directors’ report
For the financial year ended 30 June 2024
The directors of Medibank Private Limited (Medibank)
present their report on the consolidated entity consisting
of Medibank and its subsidiaries (collectively referred to
as the Group) for the year ended 30 June 2024.
References to 2023 and 2024 are to the financial years
ended on 30 June 2023 and 30 June 2024 respectively
unless otherwise stated.
Directors
The names of directors in office during the year and
up to the date of this directors’ report, unless stated
otherwise, are as follows:
Current
Mike Wilkins AO – Chair
David Koczkar – Chief Executive Officer
Dr Tracey Batten
Gerard Dalbosco
Peter Everingham
David Fagan
Kathryn Fagg AO
Linda Bardo Nicholls AO
Jay Weatherill AO (appointed effective 18 March 2024)
Former
Anna Bligh AC (retired effective 22 November 2023)
Principal activities
The principal activities of the Group during the financial
year were as a private health insurer, underwriting and
distributing private health insurance policies under its two
brands, Medibank and ahm. The Group also provides a
range of virtual health, homecare, preventative health and
primary care services through its Amplar Health Division,
which includes the Myhealth medical clinics. These services
capitalise on Medibank’s experience and expertise, and
support the Health Insurance business. The Group also has
investments in other entities and joint ventures engaged in the
provision of homecare services and short stay hospital care.
In January 2024, the Group increased its shareholding in
Myhealth Medical Group from 49% to 90%.
There were no other significant changes in the nature of
those activities during the year.
Operating and financial review
Details of the operating and financial review of the Group
including a review of operations during the year and results
of those operations are included in the operating and
financial review on pages 23 to 30.
Significant changes in state of affairs
There were no significant changes in the state of affairs
of the Group during the year.
Events since end of financial year
No matter or circumstance has arisen since the end of
the financial year that has significantly affected, or may
significantly affect, the Group's operations, or the results
of those operations, or the Group's state of affairs in future
financial years.
Future developments
Details of developments in the Group's operations in future
financial years and the expected results of those operations
are included in the operating and financial review on pages
29 to 30.
Dividends
Dividends paid or determined by Medibank during and
since the end of the year are set out in Note 5 to the
financial statements and further set out below:
• A fully franked final ordinary dividend of 8.30 cents
per share was determined in respect of the six-month
period ended 30 June 2023, paid on 5 October 2023 to
shareholders registered on 14 September 2023.
• A fully franked interim ordinary dividend of 7.20 cents per
share was determined in respect of the six-month period
ended 31 December 2023, paid on 20 March 2024 to
shareholders registered on 1 March 2024.
• A fully franked final ordinary dividend of 9.40 cents per
share has been determined in respect of the six-month
period ended 30 June 2024, payable on 26 September
2024 to shareholders registered on 5 September 2024.
Directors’ qualifications, experience
and special responsibilities
Details of the qualifications, experience and special
responsibilities of each director and company secretary
in office as at the date of this report are set out on pages
31 to 33 and form part of the directors’ report.
Annual Report 2024 53
In addition, the directors attended special purpose
committees, including in relation to financial reporting,
the 2022 cybercrime event, Medibank Uplift Program
and other matters.
Options and performance rights
During the financial year, 3,296,240 performance rights
were issued to senior executives pursuant to Medibank’s
Performance Rights Plan. No performance rights have
been issued since the end of the financial year up to the
date of this directors’ report.
During the financial year, 2,001,656 performance rights
vested and were exercised.
Further information regarding performance rights is
included in the remuneration report from page 55.
Directors’ interests in securities
The relevant interests of directors in Medibank securities
at the date of this directors’ report were:
Director
Ordinary
shares
Performance
rights
Mike Wilkins
100,000
-
David Koczkar
1,426,764
2,100,777
Dr Tracey Batten
50,000
-
Anna Bligh1
44,623
-
Gerard Dalbosco
72,832
-
Peter Everingham
40,000
-
David Fagan
47,016
-
Kathryn Fagg
32,750
-
Linda Bardo Nicholls
50,400
-
Jay Weatherill
11,600
-
1. Anna Bligh retired as a director effective 22 November 2023 and her
ordinary shareholding information is as at that date.
Directors’ attendance at meetings
The table below shows the number of Board and committee meetings held and the number of meetings attended by directors
during the year. All directors may attend committee meetings even if they are not a member of the relevant committee. The
table below does not include the attendance of directors at committee meetings where they were not a committee member.
Director
Board
(scheduled)
Board
(additional)
Audit
Committee
Risk
Management
Committee
Investment
and Capital
Committee
People and
Remuneration
Committee
Nomination
Committee
A
B
A
B
A
B
A
B
A
B
A
B
A
B
Mike Wilkins
10
10
7
7
-
-
-
-
4
4
4
4
3
3
Dr Tracey Batten
10
10
7
7
-
-
6
6
-
-
4
4
3
2
Anna Bligh1
5
4
2
2
-
-
3
3
2
2
-
-
-
-
Gerard Dalbosco
10
10
7
6
4
4
6
6
-
-
-
-
3
3
Peter Everingham2
10
10
7
7
3
3
-
-
2
2
4
4
-
-
David Fagan
10
10
7
7
4
4
6
6
-
-
-
-
3
3
Kathryn Fagg
10
10
7
6
4
4
-
-
-
-
4
4
-
-
David Koczkar
10
10
7
6
-
-
-
-
-
-
-
-
-
-
Linda Bardo Nicholls
10
10
7
7
-
-
6
6
4
3
-
-
3
3
Jay Weatherill3
3
3
2
2
1
1
1
1
-
-
-
-
-
-
A. Indicates the number of meetings held during the time the director held office or was a member of the committee during the year.
B. Indicates the number of meetings attended during the time the director held office or was a member of the committee during the year.
1. Anna Bligh retired as a director effective 22 November 2023.
2. Peter Everingham was appointed as a member of the Investment and Capital Committee effective 19 February 2024 and retired as a member of the
Audit Committee effective from 18 March 2024.
3. Jay Weatherill was appointed as a director and a member of the Audit Committee and Risk Management Committee effective 18 March 2024.
54 Medibank
Directors’ report
For the financial year ended 30 June 2024
Environmental regulation
The Group’s operations are not subject to any particular
and significant environmental regulation under either
Commonwealth or State law.
Indemnification and insurance of directors
and officers
The Medibank Constitution permits Medibank to indemnify,
to the maximum extent permitted by law, every person who
is or has been a director, secretary, officer or senior manager
of the Group. The indemnity applies to liabilities incurred by
a person in the relevant capacity (except liability for legal
costs). The indemnity may however also apply to certain
legal costs incurred in obtaining advice or defending legal
proceedings. Further, the Medibank Constitution permits
Medibank to maintain and pay insurance premiums for a
director and officer liability insurance covering every person
who is or has been a director, secretary, officer or senior
manager of the Group, to the extent permitted by law.
Consistent with the provisions in Medibank’s Constitution,
Medibank has entered into deeds of indemnity, insurance
and access with current and former directors and
secretaries of Medibank and current Medibank appointed
directors and secretaries of Medibank's subsidiaries. Under
these deeds, Medibank:
• Indemnifies the relevant current and/or former directors
and secretaries against liabilities incurred as a director
or secretary, as the case may be, to the maximum extent
permitted by law.
• Maintains a directors’ and officers’ insurance policy
covering current and former directors and secretaries
against liabilities incurred in their capacity as directors
or secretaries, as the case may be. Disclosure of the
insurance premium and the nature of the liabilities
covered by the insurance are prohibited by the contract
of insurance.
• Grants current and /or former directors and secretaries
access to Medibank’s records for the purpose of
defending any relevant action.
Auditor’s independence declaration
A copy of the auditor’s independence declaration given by
PricewaterhouseCoopers (PwC) in relation to its compliance
with independence requirements of section 307C of the
Corporations Act is set out on page 121.
Non-audit services
During the year, PwC, the Group’s external auditor,
performed certain other services to the Group in addition
to its statutory responsibilities as auditor. Details of the
amounts paid or payable to PwC for non-audit services
provided by it during the year are set out in Note 19 Auditor’s
remuneration.
Based on advice provided by the Audit Committee, the
directors are satisfied that the provision of non-audit
services during the year by PwC is compatible with the
general standard of independence for auditors imposed
by the Corporations Act, and that the provision of the
non-audit services did not compromise the auditor
independence requirements of the Corporations Act,
for the following reasons:
• All non-audit services provided were approved in
accordance with the process set out in Medibank’s
policies, including being reviewed by the Audit Committee
to ensure that provision of the services did not impact the
integrity and objectivity of the auditor.
• The non-audit services provided do not undermine the
general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional
Accountants (including Independence Standards).
Remuneration report
The remuneration report on pages 55 to 75 forms part of the
directors’ report.
Rounding of amounts
The amounts contained in this directors’ report and in the
financial report have been rounded to the nearest hundred
thousand dollars (where rounding is applicable) unless
specifically stated otherwise under the relief available
pursuant to ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. Medibank is an
entity to which that relief applies.
Annual Report 2024 55
Remuneration report
For the financial year ended 30 June 2024
Dear shareholder,
On behalf of the Board, I am pleased to present Medibank’s
remuneration report for 2024 which describes how non-
executive directors and Executive Key Management
Personnel (Executive KMP) are paid. Included in this report
are the fixed and variable remuneration outcomes for
Executive KMP, which were determined after considering the
company’s results and their individual performance.
We are pleased to deliver another solid result this year,
reflecting our focus on customers and ongoing growth as
a health company. Importantly, we have also continued to
invest in the health transition. This investment in new care
models, prevention and primary care is providing greater
choice, better access and more value to our own customers
while driving broader change needed to support the long-
term sustainability of Australia’s health system.
In a year where cost-of-living pressure has continued to
impact households, we have remained focused on providing
our customers with more value. Our average 3.31% premium
increase from 1 April 2024 is lower than both inflation and
wage growth and remains below the 10-year industry
average of 3.8%. At the same time, we have continued to
invest in new products, services, and programs to support
our customers’ health and wellbeing. We have also stuck
by our promise to not profit from COVID with our customer
support standing at $1.46 billion – the largest of any health
insurer in Australia to date.
Our 2024 financial performance demonstrates the ongoing
resilience of the resident Health Insurance business. While
both the industry and Medibank continue to grow, we have
been deliberate in our response to the ongoing competitive
environment and remain disciplined in how we manage the
business for the long term. This result also reflects strong
growth in Medibank Health including the contribution of our
increased investment in Myhealth. Our ongoing strong capital
position continues to place us well to fund our future growth.
Our remuneration strategy has been developed to recognise
our people for responsibly executing Medibank’s strategy,
role-modelling behaviours and achieving business objectives
that increase value for our customers, and shareholders, and
meet community expectations. Supporting this strategy, our
remuneration framework reinforces our risk management
framework, linking individual performance and behaviours
with achieving business objectives that support Medibank’s
long-term financial success.
Changes to Key Management Personnel
During October 2023 Medibank announced that Andrew
Wilson would be stepping down from the role of Group Lead
– Chief Executive Amplar Health after being a member of
the executive leadership team for 13 years to take on the role
of Group Chief Medical Officer on a part-time basis.
Following that move, Robert Read was appointed to the role
of Group Lead – Amplar Health. Rob has broad experience
in health including delivering customer led strategies, driving
business growth and operational management.
Changes to the Board
During September 2023 Medibank announced that non-
executive director Anna Bligh AC would not stand for re-
election and would retire from the Board at the conclusion of
the Medibank annual general meeting on 22 November 2023.
Anna joined the Board prior to Medibank’s public listing in
2014 and played a critical role in Medibank’s transformation
over the past ten years into a health company.
Following the retirement of Anna, Medibank announced
the appointment of Jay Weatherill AO as a non-
executive director effective 18 March 2024. Jay has had a
distinguished career in public office and brings expertise
across a wide range of public policy areas including reform
of social services.
Changes to Medibank’s executive remuneration
framework
During the year the Board approved several changes
to the executive remuneration framework to address
the requirements of APRA’s Prudential Standard CPS 511
Remuneration (CPS 511) and further enhance the focus on our
customers in our remuneration structures. Key changes for
2024 include:
• The introduction of customer service satisfaction in the short-
term incentive (STI) plan and the addition of a new brand
sentiment performance hurdle in the long-term incentive (LTI)
plan to give material weight to non-financial measures.
• To satisfy deferral requirements, the STI deferral period
increased from one year to a maximum of five years for
the CEO and four years for other Executive KMP, while the
percentage of STI deferred decreased from 50% to 40%.
• LTI is now deferred over a period of six years for the CEO
and five years for other Executive KMP, starting from
the beginning of the performance period, with pro-rata
release after year four.
Short-term incentives
Medibank delivered solid operational and financial
performance in 2024 with behaviours aligned to our values
and purpose of ‘Better Health for Better Lives’. Group
operating profit and Health Insurance revenue growth
outcomes were between threshold and target levels of
performance, while Service Net Promoter Score (sNPS)
exceeded stretch expectations.
These performance outcomes resulted in STI awards
for Executive KMP that averaged 61% of their maximum
opportunity. In the Board’s view, incentive awards reflect
an appropriate outcome based on overall company
performance in 2024.
56 Medibank
Long-term incentives
Medibank’s 2022 LTI was tested following the completion
of the performance period on 30 June 2024 with the
following outcomes:
• Full vesting against the earnings per share compound
annual growth rate (EPS CAGR) measure with a result
of 12.6% over the performance period.
• Partial vesting against the TSR measure with a
performance rank at the 66th percentile against our
comparator group.
• It is likely that there will be no vesting against the market
share growth measure, however this will be confirmed
once APRA releases the June Quarterly private health
insurance statistics.
Executive KMP remuneration and non-executive
director fees
Following a review of fixed remuneration levels of Executive
KMP members against the median of Medibank’s market
comparator group, the fixed remuneration of Executive
KMP was increased by an average of 4.3%, effective 1 July
2024. This includes a 4.25% increase for the Chief Executive
Officer (CEO), David Koczkar, his first since July 2022. Fixed
remuneration increases are inclusive of the superannuation
guarantee increase effective 1 July 2024 and are in line with
the increases planned for the broader salaried population.
Long-term incentive opportunity has been increased from
65% to 75% of fixed remuneration for Executive KMP and
from 150% to 175% of fixed remuneration for the CEO to
align with market practice and increase focus on delivering
sustainable business performance over the long term.
Board and committee fees were also reviewed against the
median of Medibank’s market comparator group with a
4.25% increase in Board and Committee fees agreed. These
changes are the first in two years, and the aggregate fee
spend for non-executive directors remains below the total
fee pool of $2,300,000 approved by shareholders in the
annual general meeting in 2018.
To align Medibank’s non-executive director fee cap with
our market comparator group and to provide sufficient
headroom and flexibility to manage Board succession
planning and future changes to Board and Committee
structures, shareholder approval will be sought at the annual
general meeting (AGM) in November 2024 to increase the
annual non-executive director fee cap by $700,000 to
$3,000,000. If approved, this will represent the first increase
in the fee cap in six years.
To further align interests of non-executive directors with
those of shareholders, effective 1 July 2024, non-executive
directors will be required to have a shareholding in the
company equal in value to at least one year of their pre-tax
base fee. Non-executive directors will have five years from
the effective date of this change to attain the new required
shareholding level.
Shareholders are encouraged to vote to adopt the report
at our annual general meeting in November.
Yours sincerely,
Dr Tracey Batten
Chair, People and Remuneration Committee
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 57
Contents
1. Key management personnel overview
2. Summary of remuneration outcomes
3. Medibank’s remuneration strategy
4. Remuneration governance
4.1 The role of the Board in remuneration
4.2 Executive remuneration policies
5. Risk and remuneration
5.1 Risk culture
5.2 Alignment of remuneration with prudent risk-taking
5.3 Consequence management
6. Executive KMP remuneration components
6.1 2024 target remuneration mix
6.2 Total fixed remuneration (TFR)
6.3 Short-term incentive (STI)
6.4 Long-term incentive (LTI)
7. Linking remuneration and performance in 2024
7.1 2024 short-term incentive (STI) performance
scorecard
7.2 Medibank’s 2024 financial performance
7.3 2024 STI awards
7.4 2022 long-term incentive plan outcomes
8. 2024 actual remuneration (Non-IFRS disclosure)
9. Statutory remuneration tables
9.1 Statutory remuneration table
9.2 Performance-related remuneration statutory table
10. Executive KMP equity awards
10.1 Executive KMP equity award transactions
10.2 Overview of unvested equity awards and fair value
assumptions
11. Non-executive director remuneration and framework
11.1 Non-executive director remuneration
11.2 Non-executive director superannuation
11.3 Shareholding policy for non-executive directors
12. 2024 non-executive director remuneration statutory
table
13. Non-executive director ordinary shareholdings
14. Medibank’s comparator group
15. Loans and other transactions with KMP
1. Key management personnel overview
Medibank’s key management personnel (KMP) includes all non-executive directors and executives who have authority
and responsibility for planning, directing and controlling the activities of Medibank. In 2024, KMP were as follows:
Key Management Personnel
Position
Term as KMP
David Koczkar
Chief Executive Officer (CEO)
Full-year
Milosh Milisavljevic
Group Lead – Chief Customer Officer
Full-year
Robert Read
Group Lead – Amplar Health
From 13 November 2023
Mark Rogers
Group Lead – Chief Financial Officer & Group Strategy
Full-year
Non-executive directors
Mike Wilkins
Chair
Full-year
Tracey Batten
Non-executive Director
Full-year
Gerard Dalbosco
Non-executive Director
Full-year
Peter Everingham
Non-executive Director
Full-year
David Fagan
Non-executive Director
Full-year
Kathryn Fagg
Non-executive Director
Full-year
Linda Bardo Nicholls
Non-executive Director
Full-year
Jay Weatherill
Non-executive Director
From 18 March 2024
Former KMP
Andrew Wilson
Group Lead – Chief Executive Amplar Health
Ceased as KMP on
18 December 2023
Former Non-executive director
Anna Bligh
Non-executive Director
Retired 22 November 2023
58 Medibank
Remuneration report
For the financial year ended 30 June 2024
2. Summary of remuneration outcomes
Key remuneration outcomes for Executive KMP and non-executive directors during the year are summarised below,
with more detailed information contained throughout the report.
Executive key management personnel
Fixed
remuneration
• Fixed remuneration for Executive KMP including the CEO increased by an average of 4.3%
effective 1 July 2024.
• Fixed remuneration of the CEO, David Koczkar, was increased by 4.25% to $1,615,900, effective
1 July 2024.
Short-term
incentive
(STI)
• STI awards for Executive KMP reflected performance of Group operating profit and Health
Insurance revenue growth were between threshold and target levels of performance, while Service
Net Promoter Score (sNPS) exceeded stretch expectations.
• Short-term incentive (STI) outcomes for Executive KMP in line with terms of the plan and at an
average of 61% of their maximum opportunity.
• 40% of STI awards for Executive KMP delivered in the form of performance rights which are subject
to deferral of up to five years for the CEO and four years for other Executive KMP members.
• STI target percentages for Executive KMP members, including the CEO, have been maintained at
current levels.
Long-term
incentive
(LTI)
• Medibank’s 2022 LTI was tested following the completion of the performance period on 30 June
2024 and resulted in a vesting outcome of 63.7% in line with the terms of the grant.
• This outcome reflects full vesting against the EPS CAGR measure with a result of 12.6% which
includes costs associated with the cybercrime event and partial vesting against the TSR measure
with a performance rank at the 66th percentile against our comparator group. It is likely that there
will be no vesting against the market share growth measure, however this will be confirmed once
APRA releases the June Quarterly private health insurance statistics.
• 2025 LTI opportunity for the CEO has been increased from 150% to 175% of fixed remuneration.
• 2025 LTI opportunity percentages for Executive KMP other than the CEO have been increased
from 65% to 75% of fixed remuneration.
Non-executive directors
Non-executive
director fees
• The annual base fee for the Chair was increased by 4.25% to $478,000, and the annual base fee
for other non-executive directors was increased by 4.25% to $177,250, both effective 1 July 2024.
• Committee chair fees and committee membership fees were increased by an average of 4.2%
effective 1 July 2024 to $42,950 and $21,450 respectively.
• The aggregate non-executive director fee spend remains below the approved total fee pool of
$2,300,000.
• Medibank will seek shareholder approval to increase the annual non-executive director fee cap by
$700,000 to $3,000,000 at the Annual General Meeting (AGM) in November 2024.
3. Medibank’s remuneration strategy
At Medibank, we believe that remuneration has a key
influence on behaviour and is valuable in reinforcing our
culture. Our people are guided by our purpose and values
which are anchored to the core pillars of our culture –
health and wellbeing, our people and customers, and our
performance.
Our remuneration strategy has been developed to reward
our people for responsibly executing Medibank’s strategy,
role-modelling behaviours that strengthen our purpose and
values-based culture and achieving business objectives
that increase value for our customers and shareholders.
Supporting this strategy, our remuneration framework is
designed to link reward to business outcomes, individual
performance and behaviour, support Medibank’s long-term
financial success and risk management framework, and
comply with APRA’s CPS 511.
The following diagram illustrates the relationship between
Medibank’s remuneration strategy, reward framework and
the timeline of when 2024 remuneration is delivered.
Annual Report 2024 59
Medibank’s remuneration strategy
Focus employees on responsibly executing Group strategy to increase customer and shareholder value
with behaviours aligned to Medibank’s values and purpose
Attract and retain
key talent through
competitive and fair
fixed remuneration
Incentivise
high performance
through variable,
at-risk payments
Reward employees for the
achievement of business
outcomes aligned with
Medibank’s culture
Align the interests of
executives with increasing
long-term customer and
shareholder value
Medibank’s total target reward framework
Total fixed
remuneration
(TFR)
• Determined with reference to capability, experience, the complexity of the role, as well as median pay levels
of Medibank’s comparator group
• Paid on a fortnightly basis in base salary and superannuation
Performance measures
Delivery
Short-term
incentive
(STI)
For an STI to be awarded:
• Individuals must pass a risk, compliance, and behaviour
gateway; and
• Medibank must achieve a baseline Group operating target
Performance measures:
• Group operating profit
• Health Insurance revenue growth
• Service Net Promoter Score (sNPS)
• Role-specific metrics
CEO and other Executive KMP:
• 60% cash
• 40% performance rights deferred for
up to 5 years for the CEO and up to
4 years for other Executive KMP
Long-term
incentive
(LTI)
• Earnings per share compound annual growth rate
• Relative total shareholder return
• Growth of Medibank’s private health insurance market share
• Customer Net Promoter Score (cNPS)
Performance rights with a 3-year performance
period and deferral after vesting of:
• 3 years for the CEO
• 2 years for other Executive KMP
CEO – 2024 remuneration timeline
FY24
FY25
FY26
FY27
FY28
FY29
FY30
TFR
Base salary + super
STI
Cash
60%
Deferred
8%
8%
8%
8%
8%
LTI
Relative total shareholder return (30%)
33%
33%
34%
EPS CAGR (30%)
PHI market share growth (20%)
Customer NPS (20%)
Other Executive KMP – 2024 remuneration timeline
FY24
FY25
FY26
FY27
FY28
FY29
TFR
Base salary + super
STI
Cash
60%
Deferred
10%
10%
10%
10%
LTI
Relative total shareholder return (30%)
50%
50%
EPS CAGR (30%)
PHI market share growth (20%)
Customer NPS (20%)
date earned/vested
date granted
eligible for payment or exercise
Supported by Medibank’s Consequence Management Policy and the Malus & Clawback policy. The P&RC and Risk Committee may apply
discretion to ensure appropriate alignment of remuneration outcomes to Medibank’s risk framework and Code of Conduct.
60 Medibank
Remuneration report
For the financial year ended 30 June 2024
4. Remuneration governance
Medibank has a robust governance framework in place to
ensure that our remuneration and performance practices
are fair, reasonable and aligned with the requirements
outlined in our risk management framework. Our governance
framework also considers regulatory compliance, customer
outcomes, community expectations and the delivery of
sustainable shareholder value.
4.1 The role of the Board in remuneration
The People and Remuneration Committee (P&RC) is a
committee of the Board. The diagram below outlines the role
of the P&RC in assisting and advising the Board on people
and culture policies and practices, including remuneration:
While there are four permanent members of the P&RC, a
standing invitation exists to all non-executive directors to
attend meetings. The Chief Executive Officer (CEO) and
Group Lead – People, Spaces & Sustainability are also
invited to attend P&RC meetings, except where matters
associated with their own performance or remuneration
are considered. Specific governance activities with respect
to the P&RC include regular reviews of the P&RC Charter
to ensure consideration of changing regulations, guidelines
and best practice and an annual audit of committee
minutes against the P&RC Charter. For P&RC meeting
attendance information, refer to the table on page 53
of the directors’ report.
4.2 Executive remuneration policies
4.2.1 Performance evaluation of Executive KMP
members
At the outset of each performance year, the Board
determines the measures against which Executive KMP
will be assessed. The measures are a combination of
Medibank (Company) and role-specific performance
measures that are aligned to the achievement of Medibank’s
customer and financial milestones set out in the annual
report. Aligned with Medibank’s Group-wide performance
framework ‘Impact Bigger’, the role-specific measures
for Executive KMP are known as ‘Impact Goals’. Impact
Goals are designed to be ambitious, aspirational and shift
expectations from delivering at a base level against core job
requirements to driving strong, impactful performance. The
Impact Goals adopted by each Executive KMP then form the
basis for the Impact Goals adopted by their leadership team
members and respective teams to ensure all employees
across the Group are working towards a shared and
consistent strategy.
At the completion of the performance year, Executive KMP
are individually assessed against the risk, compliance and
behaviour gateway which is outlined in section 6.3. Executive
KMP are then attributed an individual performance outcome
against a 5-point rating scale (with a minimum rating of
3 required to receive a short-term incentive (STI) award)
that assesses Executive KMP performance and behaviours
against business outcomes and achievement of role-specific
performance measures. The individual performance ratings
of Executive KMP are then combined with performance
against Company measures to determine STI outcomes.
Reviewing and overseeing
Medibank’s key people and
culture strategies, including
employee engagement,
values, behaviours and
diversity and inclusion
Reviewing employee
remuneration
arrangements with
consideration for
behaviours, regulatory
compliance, customer
outcomes, community
expectations and
shareholder value
Reviewing and monitoring
Medibank’s health, safety
and wellbeing strategy,
workplace relations and
payroll integrity
Reviewing and monitoring
Medibank’s strategies for
executive succession, talent
acquisition and retention
Ensuring that Medibank’s
performance and
remuneration practices
are consistent with the risk
management framework
and drive appropriate
behaviours and a
values-based culture
Independent remuneration
consultant
• Ernst & Young provides
information to assist
the P&RC in making
remuneration decisions and
recommendations to the Board
• The work undertaken by
Ernst & Young in 2024 did not
constitute a remuneration
recommendation
P&RC
Annual Report 2024 61
With respect to fixed remuneration adjustments,
consideration is given to role-specific performance,
experience, the complexity of the role and Medibank’s
market comparator group. Additional detail on STI
performance measures are included in sections 6 and 7 of
this report and further information on fixed remuneration
levels for Executive KMP is outlined in section 6.2.
The CEO provides his performance assessment of each
Executive KMP, and other executive leadership team (ELT)
members, to the Board for consideration. The Chair, in
consultation with the Board, assesses the performance,
behaviour and conduct of the CEO. The Board has ultimate
discretion over final individual performance outcomes
for all ELT members to ensure alignment with Medibank
performance, customer outcomes, community and
shareholder expectations.
4.2.2 Malus and clawback of executive performance-
based remuneration
Medibank’s Malus and Clawback Policy provides the Board
with discretion to reduce, cancel, or recover performance-
based awards made to employees in certain circumstances
and subject to applicable laws, including the following:
• Serious misconduct, fraud or dishonesty by the employee.
• Any behaviour, act or omission by the employee that
impacts on the Group’s reputation or long-term financial
soundness.
• A material misstatement of the Group’s financial
statements.
• The Board becomes aware of any other action or behaviour
that it determines (acting in good faith) has resulted in
the employee receiving an inappropriate benefit.
The Malus and Clawback Policy provides that if any
of these events occur the Board may, in its absolute
discretion, withhold an employee’s performance-based
payments, require the repayment of all, or part of, previous
performance-based awards, lapse previously deferred and
unvested performance-based rewards, or otherwise alter an
employee’s remuneration subject to applicable laws.
Malus provisions allow Medibank to reduce or cancel the
award before it has been paid, while clawback provisions
allow an organisation to, subject to applicable laws, recover
a performance-based award after it has been paid (or share
awards vested).
4.2.3 Executive shareholding requirements
Executive KMP are subject to a Minimum Shareholding
Policy that is designed to strengthen their alignment with
customers and shareholders by requiring them to hold
Medibank shares with a value equivalent to 100% of their
annual fixed remuneration within five years of appointment
to the executive leadership team. The policy does not
require a person to purchase shares, however they are
restricted from selling their vested employee equity holdings
(other than to satisfy income tax obligations) until they meet
the minimum shareholding requirement.
All Medibank shares and unvested performance rights that
are subject to a tenure-based hurdle held by, or on behalf of,
the person (for example within a family trust or self-managed
superannuation fund where they are the beneficial owner)
will count towards satisfaction of the minimum shareholding
requirement.
As at 30 June 2024, progress towards the minimum
shareholding requirement for each Executive KMP is
provided below:
Executive KMP3
Minimum
shareholding
requirement $1
Value of eligible
shareholdings as
at 30 June 2024 $2
Minimum
shareholding
requirement timeline
David Koczkar
1,550,000
5,321,830
Requirement satisfied
Milosh Milisavljevic
900,000
581,526
22 June 2026
Robert Read
700,000
-
13 November 2028
Mark Rogers
1,070,000
2,999,397
Requirement satisfied
1. Minimum shareholding requirement based on each persons’ total fixed remuneration (TFR) as at 30 June 2024.
2. Holding value is calculated with reference to the total number of eligible shares or performance rights held by each person, multiplied by the closing
price of Medibank’s shares on 30 June 2024 ($3.73).
3. Andrew Wilson ceased to be an Executive KMP on 18 December 2023 and was not subject to this policy as at 30 June 2024.
62 Medibank
4.2.4 Share Trading Policy
We have a Share Trading Policy to ensure that non-
executive directors and all employees understand their
obligations in relation to dealing in Medibank shares. The
Share Trading Policy describes restrictions on buying and
selling Medibank shares.
In addition, non-executive directors, all senior executives,
and employees with potential access to inside information
are deemed to be ‘Restricted Employees.’ They are required
to seek approval before dealing in Medibank shares and
are subject to share trading blackouts prior to financial
result announcements and other times, as required. The
policy also prohibits employees from entering transactions
relating to Medibank shares which limit their economic risks,
including in relation to the long-term incentive (LTI) Plan and
equity-based component of the STI Plan.
Medibank’s Share Trading Policy can be found within the
corporate governance section on our website.
4.2.5 Termination provisions in Executive KMP
contracts
All current Executive KMP are employed under ongoing
contracts with notice periods set at 3 months (employee)
and 6 months (employer), or in the case of the CEO, 6 months
(both employee and employer). Termination provisions
included in Executive KMP contracts are limited to 6 months
payment of fixed remuneration, in lieu of notice.
If an Executive KMP is assessed by the Board as a ‘good
leaver’ (meaning they cease employment by reason of
death, serious disability, permanent incapacity, retirement,
redundancy or with Board approval), the cash STI award
in respect of the performance year in which they leave
would be paid on a pro rata basis at the end of the STI
performance period. The deferred component of the STI
award will be paid in cash (rather than performance rights)
on a pro rata basis with payment deferred on the same
terms outlined in the STI plan rules. Any previously deferred
STI remains restricted until the applicable exercise date,
unless determined otherwise by the Board. Performance
rights issued as LTI are retained on a pro rata basis by a
‘good leaver’. Retained performance rights remain unvested
and subject to the same vesting conditions that will be
assessed at the end of the performance period. Further
details of the termination provisions that relate to the STI
and LTI plans are detailed in section 6 of this report.
5. Risk and remuneration
A key focus for Medibank’s Board and the P&RC is ensuring
our remuneration policies and practices are consistent with
our risk management framework, aligned with prudent risk
taking and support the effective management of financial
and non-financial risks.
5.1 Risk culture
An engaged culture is contingent on alignment between
purpose, values, behaviours and strategic direction. With
a focus on ensuring we do the right thing for our people,
customers and community, Medibank’s purpose and values
provide guidance for the behaviours we expect of our
employees. The Risk Culture Framework, outlined below,
articulates the key elements that influence and shape our
risk culture in terms of behaviours and practices. Our current
suite of measurements (behavioural metrics and survey
responses) fully aligns with the framework elements and
risk behaviours to ensure they provide the right insights and
conditions for positive action.
Our Risk Culture Framework builds on Medibank’s Code of
Conduct which sets out the way we work at Medibank via
the establishment of standards of behaviour and conduct
expected from all employees. The code not only emphasises
the importance of compliance with legal obligations, it also
clearly outlines our responsibility toward our employees, our
customers, and the wider community. In adhering to these
principles, we strive to create a culture that goes beyond
mere compliance, to one that fosters a genuine commitment
to ethical decision-making and responsible practices.
The behaviours that support our risk culture include:
• Leaders at all levels championing risk management,
setting a clear tone and role modelling appropriate risk
behaviours.
• Openness to consider diverse viewpoints and to provide
constructive challenge and feedback across the
organisation.
• Risk issues are openly communicated across the
organisation and supported by an environment where
people feel safe to speak up.
• Level of skills and training, processes, systems and data
across the 3 Lines of Defence to support effective risk
management practices and behaviours.
5.2 Alignment of remuneration with prudent
risk taking
We believe that the effective alignment of remuneration
with the risk appetite set by the Board is critical to our
remuneration strategy and framework. Under Medibank’s
Group-wide performance framework ‘Impact Bigger’, at
the end of each financial year all employees are assessed
against their personal scorecard, which is a combination
of financial and non-financial measures, including
performance against their risk, compliance and behaviour
obligations. Through the performance assessment process,
both positive and negative risk, compliance and behaviour
outcomes are considered as part of a holistic performance
assessment. Employees are then attributed an outcome
against a five-point rating scale (with a minimum rating
of three required to receive an STI award) that assesses
Executive KMP performance and behaviours against
business outcomes and achievement of role-specific
performance measures. This then informs remuneration
and performance-based incentive outcomes for the period.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 63
The management of financial and non-financial risks by
senior executives is reviewed by the Risk Management
Committee (RMC). As part of this review the RMC considers
the effective operation of divisional risk committees,
incident identification, audit findings, remediation actions,
health and safety, and feedback on risk culture from
employees. In addition, the Hub Lead – Group Risk & Chief
Risk Officer, Group Lead – People, Spaces & Sustainability
and Group Lead – Trust, Legal & Compliance are specifically
tasked with notifying the Board of any relevant risk and
compliance outcomes and/or conduct which may impact
performance and remuneration outcomes for Executive
KMP (including the CEO) and other senior executives.
Further, as outlined throughout this report, Medibank’s
executive reward framework includes long-term deferral
across both our STI Plan and long-term incentive (LTI)
Plan to ensure risk outcomes are considered over
extended periods.
5.3 Consequence management
A well understood and consistently applied consequence
management process is a key part of our risk culture and
ensures risk, compliance and behaviour outcomes are
aligned with remuneration outcomes. Consequences
of employees breaching Medibank’s Code of Conduct
are clearly articulated and may include an employee
attending further training or counselling, a formal written
warning being applied, or in certain circumstances,
termination of employment. The issue of a final written
warning automatically results in the employee being given
an ‘unsatisfactory’ performance rating for the relevant
performance period, meaning the individual is ineligible
for any performance-based reward outcome or fixed
remuneration increase. Medibank’s STI plan rules also clearly
articulate that failure to meet the risk, compliance and
behaviour gateway in any given performance period will lead
to ineligibility for a STI award for the performance period.
In 2024, eight employees were issued with final written
warnings following a breach of Medibank’s Code of
Conduct, or another Medibank Group policy. In all
cases, each employee received a performance rating
of ‘unsatisfactory’ and was ineligible for any applicable
performance-based incentive or fixed remuneration
increase. A further nine individuals in 2024 had their
employment terminated following an incident of misconduct.
Further details on consequence management can be found
in our Sustainability Report 2024.
6. Executive KMP remuneration components
Target remuneration for Executive KMP is designed to
reward sustained business performance with behaviours
aligned with Medibank’s values and purpose that increases
value for both, customers and shareholders. The Board
aims to find a balance between:
• Fixed and at-risk remuneration.
• Short-term and long-term remuneration.
• Remuneration delivered in cash and deferred equity.
6.1 2024 target remuneration mix
The 2024 target remuneration mix for Medibank’s Executive
KMP is shown below.
Mark Rogers
Former KMP
Robert Read1
Milosh
Milisavljevic
David Koczkar
28.6%
17.1%
11.4%
42.9%
43.5%
17.0%
11.3%
28.2%
43.5%
17.0%
11.3%
28.2%
43.5%
17.0%
11.3%
28.2%
Andrew Wilson2
43.5%
17.0%
11.3%
28.2%
Fixed
STI cash
Deferred STI (equity)
LTI (equity)
1. Robert Read’s remuneration mix reflects his Group Lead –
Amplar Health position applicable from 13 November 2023.
2. Andrew Wilson’s remuneration mix reflects his prior role as
Group Lead – Chief Executive Amplar Health.
6.2 Total fixed remuneration (TFR)
Total fixed remuneration (TFR) is the fixed portion of
remuneration and includes base salary and employer
superannuation contributions. Fixed remuneration is
determined with reference to the executive’s capabilities,
experience, the complexity of the role, as well as median
pay levels for similar roles at companies in the ASX 11-100
(excluding mining and energy companies). This ensures that
fixed remuneration is set at competitive levels and enables
Medibank to attract and retain high quality executives.
Further details of Medibank’s comparator group of
companies is outlined in section 14 of this report. The table
below outlines the current TFR settings for Executive KMP.
6.2.1 Total fixed remuneration
Executive KMP
30 June 2024 $
1 July 2024 $
David Koczkar
1,550,000
1,615,900
Milosh Milisavljevic
900,000
930,000
Robert Read1
700,000
750,000
Mark Rogers
1,070,000
1,105,000
Former Executive KMP
Andrew Wilson2
1,020,000
Not applicable
1. This represents Robert Read’s TFR as at 30 June 2024 following
his appointment as Group Lead – Amplar Health.
2. This represents Andrew Wilson’s TFR as at 18 December 2023,
being the date he ceased to be Executive KMP.
64 Medibank
6.3 Short-term incentive (STI)
STI is an at-risk element of remuneration, which is designed
to reward executives for the creation of customer and
shareholder value during the financial year. Executives must
pass two separate gateways to participate in the plan.
Once both gateways are achieved, executives have the
opportunity to earn a percentage of their fixed remuneration
as an incentive, based on company and individual
performance.
6.3.1 STI gateways
For an STI award to be made to an executive, the following
gateways must be achieved:
Risk, compliance and behaviour gateway
Individually assessed, the risk, compliance and behaviour
gateway requires executives to:
• Adhere to Medibank’s Code of Conduct which covers
standards of behaviour and conduct which includes
anti-harassment, anti-discrimination and anti-bribery and
corruption obligations. Our Code of Conduct requires all
employees to not only comply with our legal obligations,
but also to act ethically and responsibly in relation to our
customers, colleagues and the community.
• Complete all mandatory compliance training which
includes privacy, cyber-security, health and safety,
bullying and harassment, bribery and corruption and
meeting our legal, ethical and governance requirements.
• Ensure that the risks in respect of their position are well
managed. Multiple factors are considered when assessing
risk management (including environment, social and
corporate governance and climate risks where relevant),
which differ based on an executive’s role. Common
elements include the effective operation of divisional
risk committees, incident identification, audit findings,
remediation actions, health and safety, and feedback on
risk culture from employees.
Assessment of the risk, compliance and behaviour
gateway is also subject to feedback provided by the
Hub Lead – Group Risk & Chief Risk Officer, Group Lead
– People, Spaces & Sustainability and Group Lead
– Trust, Legal & Compliance as outlined in section 5.2.
Financial gateway
Assessed at the Group level, Medibank must achieve a
baseline Group operating profit target for an STI to be
awarded.
6.3.2 STI performance measurement
The Board determines challenging levels of performance for
each Medibank and role-specific STI performance measure.
When setting performance expectations the Board considers
numerous factors, including Medibank’s strategic objectives,
prior year performance, the external environment, customer
outcomes and shareholder expectations. The Board also
ensures that performance levels are set for the current year in
the context of achieving longer term customer and financial
strategic goals. Further detail on each performance measure
is outlined in section 7.1.
At the completion of the performance year, an assessment
is first made on the achievement of the STI gateways.
If achieved, executives are then assessed against the
company and role-specific performance measures to
determine STI award outcomes. There is a threshold level
of performance for each Medibank and role-specific
measure as set by the Board that needs to be achieved for
an STI award to be paid (for that element of the award). For
an executive to achieve a target STI award, performance
against Medibank and role-specific measures must be at
the target level of performance as set by the Board (for
that element of the award) and delivered with behaviours
aligned with Medibank’s purpose and values.
For an executive to achieve a stretch STI award,
performance against all Medibank and role-specific
measures must be at or above stretch performance as set
by the Board (for that element of the award) and delivered
with behaviours aligned with Medibank’s values and
purpose. This would represent exceptional performance,
well above that of Medibank’s strategic plan.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 65
6.3.3 Key features of the STI plan
Over what period is
performance assessed?
The STI performance period is the financial year 1 July to 30 June.
How are STI
payments delivered?
60% of STI awarded to Executive KMP is paid as cash, with the remaining 40% provided
in the form of deferred performance rights that are subject to a one year service condition.
When are STI
payments made?
The cash component of STI is paid following the release of audited financial results,
with performance rights for the deferred STI component granted shortly thereafter.
What is the deferral
period for the deferred
STI component?
Performance rights are deferred for:
• up to five years for the CEO, with 20% of the deferred amount released each year
following the conclusion of the service period; and
• up to four years for other KMP, with 25% of the deferred amount released each year
following the conclusion of the service period.
The exercise of each tranche is subject to the assessment by the Board of the application
of Medibank’s Malus and Clawback policy to the relevant tranche and after the relevant
annual results are announced to the ASX.
What method is used to
determine the number of
performance rights granted
to each participant as part
of the deferred STI?
Performance rights under the STI plan are granted at face value. The deferred STI value
for each Executive KMP is divided by the volume weighted average share price (VWAP)
of Medibank shares to determine the number of units granted.
Are deferred STI
performance rights
entitled to receive a
dividend payment?
Deferred STI performance rights do not attract dividends during the deferral period.
To align participant outcomes with shareholders, on exercise of these performance rights
additional Medibank shares are granted to ensure each participant receives a benefit
equivalent to any dividends paid during the deferral period on the rights being exercised.
What gateways apply
to the STI plan?
For an STI award to be made to Executive KMP, both the risk, compliance and
behaviour gateway, and the financial gateway must be achieved. Further detail
on these gateways is outlined in section 6.3.1.
What are the performance
measures under the
STI plan?
Performance measures under the STI plan are determined by the Board at the
commencement of each performance period. For 2024, the performance measures were:
• Group operating profit (excluding investment income).
• Health Insurance premium revenue growth.
• Customer service satisfaction.
• Role-specific metrics.
Section 7.1 of this report provides a detailed description of Medibank’s STI
performance measures and a description of how the organisation has performed
against each measure in 2024. Actual target values are not disclosed as this is
considered commercially sensitive information.
Does Medibank have a
malus and clawback policy
that applies to the STI plan?
Medibank has a Malus and Clawback Policy that provides discretion to the Board to
reduce, cancel, or recover (clawback) any award made under the STI plan to employees
in certain circumstances subject to applicable laws. Further detail on this policy is
outlined in section 4.2.2.
What happens to STI
entitlements if an executive
leaves Medibank?
If an executive is a ‘good leaver’ (meaning they cease employment by reason of
death, serious disability, permanent incapacity, retirement, redundancy, or with
Board approval), pro rata payment of STI applies.
Section 4.2.5 provides additional information on the treatment of STI for people
deemed as ‘good leavers’ by the Board.
Other than in the case of dismissal, an executive who ceases employment after meeting
the service period will retain the deferred STI performance rights which will remain
subject to malus and clawback and will be released as per the deferral schedule.
In what circumstances are
STI entitlements forfeited?
In the event an executive is not considered a ‘good leaver’ (meaning they cease employment
for any reason other than death, serious disability, permanent incapacity, retirement,
redundancy or with Board approval), the executive will forfeit any payment under the STI
plan, including any unvested deferred STI grants, unless otherwise determined by the Board.
66 Medibank
6.3.4 Annual STI opportunity
The target and maximum annual STI opportunity as a
percentage of total fixed remuneration for each Executive
KMP is outlined in the table below.
2024 & 2025
Executive KMP
Target
Maximum
David Koczkar
100%
150%
Milosh Milisavljevic
65%
120%
Robert Read1
65%
120%
Mark Rogers
65%
120%
Former Executive KMP
Andrew Wilson2
65%
120%
1. Robert Read’s target and maximum STI opportunity reflect his new
position of Group Lead – Amplar Health.
2. Andrew Wilson’s STI opportunity refers only to 2024 and is based
on his previous role as an Executive KMP.
6.4 Long-term incentive (LTI)
LTI is an at-risk element of remuneration designed to
reward executives for delivering sustainable business
performance over the long term. Given the nature of the
private health insurance industry and the fact that it is highly
regulated, the Board considers it appropriate to measure
long term performance over a three-year period with
deferral conditions applying to vested awards. A three-year
performance period with the additional deferral conditions,
strikes a balance between providing a reasonable period
to align reward with shareholder return and the LTI acting
as a vehicle for executive motivation and retention. Each
year executives are eligible to receive an LTI which is
calculated as a percentage of their fixed remuneration.
This incentive is subject to performance hurdles that will
be tested at the end of the three-year performance period.
Based on performance against these hurdles a percentage
of the incentive will be retained by the executive with the
remainder being forfeited. Vested performance rights are
subject to a deferral period of up to three years for the
CEO and up to two years for other Executive KMP.
6.4.1 Key features of the LTI plan
What is the aim of the
LTI plan?
The Medibank LTI plan is designed to:
• Align the interests of executives more closely with the interests of customers and
shareholders, by providing an opportunity for those executives to receive an equity
interest in Medibank through the granting of performance rights.
• Assist in the motivation, retention and reward of executives over the performance and
deferral periods.
What are performance
rights?
Performance rights issued to executives under the LTI plan are conditional rights for the
participant to subscribe for fully paid ordinary shares in Medibank. Each performance right
entitles the executive to subscribe for one ordinary share if the performance hurdles are
met at the conclusion of the performance period. No amount is payable by the participant
upon exercise of the performance rights once they have vested.
What method is used to
determine the number of
performance rights granted
to each participant?
Performance rights under the LTI plan are granted at face value. Each participant receives
a percentage of their fixed remuneration in LTI (refer to section 6.4.2 for details). This
amount is then divided by the face value of Medibank shares.
For the 2024 LTI plan, the number of performance rights granted to each participant was
determined using the volume weighted average price of Medibank shares on the ASX
during the 10 trading days up to and including, 30 June 2023. This average price was $3.56.
What is the performance
period for 2024 LTI plan?
The performance period for the 2024 LTI plan is three financial years commencing 1 July 2023.
When is the LTI
delivered?
Following the three-year performance period any performance rights that meet the
performance hurdles vest and are then subject to a deferral period of up to three years for
the CEO and up to two years for other KMP.
What is the deferral
period for LTI?
Vested performance rights are deferred for:
• Up to three years for the CEO, with one third being exercised each year starting at the
beginning of the year following the end of the performance period.
• Up to two years for other KMP, with half being exercised at the beginning of the year
following the end of the performance period, and the remaining amount being exercised
in the following year.
The exercise of each tranche is subject to the assessment by the Board of the application
of Medibank’s Malus and Clawback policy to the relevant tranche and after the relevant
annual results are announced to the ASX.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 67
What are the performance
hurdles under the 2024
LTI plan?
Performance rights issued under the 2024 LTI plan are subject to four separate performance
hurdles, providing for an appropriate balance of financial and non-financial performance:
• 30% of the performance rights are subject to a performance hurdle based on Medibank’s
earnings per share compound annual growth rate (EPS CAGR) over the performance
period. The starting point for EPS will be calculated using Medibank’s underlying profit as
at 30 June 2023 and the performance period for the EPS performance hurdle will run for
three years from 1 July 2023 through to 30 June 2026. Further detail on the profit measure
used in the calculation of EPS is provided in section 6.4.3.
• 30% of the performance rights are subject to a relative total shareholder return (TSR)
performance hurdle, measured over the performance period. Medibank’s relative TSR will
be compared to a comparator group comprising companies with a market capitalisation
positioned within the ASX 11-100 (excluding mining and energy companies).
• 20% of the performance rights are subject to a performance hurdle based on the growth
of Medibank’s private health insurance market share (as reported by APRA) over the
performance period.
• 20% of the performance rights are subject to a performance hurdle based on brand
sentiment, measured as the change in Medibank’s Customer Net Promotor Score over
the performance period.
These performance hurdles were chosen by the Board as they are aligned with the
interests of our customers and shareholders and represent well understood and
transparent mechanisms to measure performance and provide a strong link between
executive reward, customer outcomes, and shareholder wealth creation.
The performance hurdles under the 2024 LTI plan have threshold levels which need to
be achieved before vesting commences. Details of these thresholds are outlined in the
vesting schedule in section 6.4.3.
When do the performance
rights vest?
Performance hurdles are assessed as soon as practicable after the completion of the
relevant performance period. The number of performance rights that vest (if any) will be
relative to the achievement against the performance hurdles. See section 6.4.3 for the
vesting schedule associated with each performance hurdle.
Are the performance
hurdles re-tested?
No. Performance hurdles are only tested once at the end of the performance period.
Any performance rights that remain unvested at the end of the performance period are
immediately forfeited.
Are LTI performance
rights entitled to receive a
dividend payment?
LTI performance rights do not attract a dividend during the performance period, as they
are still subject to performance hurdles that will determine the number of rights that
convert to ordinary Medibank shares. Vested performance rights do not attract dividends
during the deferral period. However, on exercise of the vested performance rights,
additional Medibank shares are granted to ensure each participant receives a benefit
equivalent to any dividends paid during the deferral period on the rights being exercised.
Does Medibank have a
malus and clawback policy
that applies to the LTI plan?
Medibank has a Malus and Clawback Policy that provides discretion to the Board to reduce,
cancel, or recover (clawback) any award made under the LTI Plan to an employee in certain
circumstances subject to applicable laws. Further detail on this policy is outlined in section 4.2.2.
What happens to LTI
entitlements if a participant
leaves Medibank?
If a participant is a ‘good leaver’ (meaning they cease employment by reason of death,
serious disability, permanent incapacity, retirement, redundancy, or with Board approval),
a portion of the performance rights held (granted, but not vested) by that participant
on cessation of employment will be forfeited on a pro rata basis according to a formula
which takes into account the length of time the participant has held the performance
rights relative to the performance period for the grant. The retained performance rights will
remain unvested and will be tested at the end of the performance period against the existing
performance hurdles. Vested performance rights remain subject to deferral conditions.
In what circumstances are
LTI entitlements forfeited?
LTI entitlements are forfeited if performance hurdles are not met. In the event a
participant is not considered a ‘good leaver’ (meaning they cease employment for any
reason other than death, serious disability, permanent incapacity, retirement, redundancy
or with Board approval), the performance rights held (granted, but not vested) by that
participant on cessation of employment will be automatically forfeited.
68 Medibank
The annual LTI allocation value as a percentage of TFR for
each Executive KMP is outlined in the table below.
6.4.2 Annual LTI allocation
2024
2025
Executive KMP
LTI allocation
value as % of
TFR
LTI allocation
value as % of
TFR
David Koczkar
150%
175%
Milosh Milisavljevic
65%
75%
Robert Read1
65%
75%
Mark Rogers
65%
75%
Former Executive KMP
Andrew Wilson2
65%
Not applicable
1. Robert Read’s 2024 LTI opportunity reflects his new position of Group
Lead – Amplar Health.
2. Andrew Wilson’s 2024 LTI opportunity reflects his prior role as Group
Lead – Chief Executive Amplar Health.
6.4.3 LTI hurdles explained
Each year, the Board reviews the LTI targets and vesting
conditions in the context of Medibank’s operating
environment. In addition to the FY23 LTI measures of
EPS CAGR, Relative TSR and Medibank’s private health
insurance (PHI) market share growth, brand sentiment has
been added as a new hurdle from FY24 to improve the
balance between financial and non-financial measures.
The Board is committed to setting targets which are
appropriately challenging for management to meet while
not being unattainable and which ultimately support
the delivery of strong outcomes for our customers and
shareholders. The vesting schedules for EPS CAGR,
Relative TSR and PHI market share growth for FY24 remain
consistent with the schedules applied to the FY23 LTI offer.
2024 EPS performance rights (30% of award)
The Board approved maintaining a threshold EPS CAGR
target of 3% for the 2024 LTI grant. Details of the vesting
schedule are outlined in the table below:
Medibank’s EPS CAGR over
the performance period
Percentage of EPS
performance rights that vest
Less than 3% EPS CAGR
Nil
Between 3% and 7% EPS
CAGR
Straight-line pro rata vesting
between 50% and 100%
Above 7% EPS CAGR
100%
Medibank’s performance against the EPS hurdle is
calculated based on the compound annual growth rate
(CAGR) of Medibank’s EPS over the performance period.
EPS is based on underlying profit, which adjusts statutory
net profit after tax (NPAT) where appropriate, for short-term
outcomes that are expected to normalise over the medium
to longer term, most notably in relation to the level of gains
or losses from investments, due to the limited control that
management has over these outcomes.
2024 TSR performance rights (30% of award)
The Board approved maintaining the vesting schedule for
the TSR hurdle. Medibank’s TSR will be compared against
companies within the ASX 11-100 (excluding mining and
energy companies), which is the same comparator group
used for executive and non-executive remuneration
benchmarking. For any of the 2024 TSR performance rights
to vest, Medibank must achieve the threshold TSR ranking
over the performance period. The percentage of the 2024
TSR performance rights that vest, if any, will be based on
Medibank’s TSR ranking at the end of the performance
period, as set out in the following vesting schedule.
Medibank’s TSR rank in the
2024 comparator group
Percentage of TSR
performance rights that vest
Less than 50th percentile
Nil
Between the 50th and 75th
percentile
Straight-line pro rata vesting
between 50% and 100%
Above 75th percentile
100%
The TSR of Medibank and other companies within the
comparator group, expressed as a compound annual rate of
return, will be comprised of:
a) The change in share price of each company over the
performance period. The change in share price is
calculated using the volume weighted average price
(VWAP) of each entity over the 20 trading days leading up
to and including the performance period start and end
dates. The VWAP at the end of the performance period
will be adjusted for any stock splits that occur during the
performance period.
b) The value of all dividends and other shareholder benefits
paid by each company during the performance period
assuming that:
i. The dividends and shareholder benefits are reinvested
in the relevant company at the closing price of the
securities on the date the dividend or shareholder
benefit was paid.
ii. Franking credits are disregarded.
The entities comprising the 2024 comparator group are
determined at the commencement of the performance
period. If the ordinary shares or stock of a member of the
2024 comparator group is not quoted on the ASX at the
end of the performance period (for example if the member
has been delisted for any reason), then it will be excluded
from calculations of the TSR calculation, unless the Board,
acting in good faith and in its absolute discretion, determine
otherwise. In exercising its discretion, the Board may have
regard to such matters it deems relevant including (but not
limited to) the length of time that the member was quoted on
the ASX during the performance period.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 69
2024 market share performance rights (20% of award)
The Board approved maintaining a threshold private health
insurance (PHI) market share growth target of 25 basis
points. Details of the vesting schedule are set out below:
Medibank’s PHI market
share growth
Percentage of market share
performance rights that vest
Less than 25 basis points
Nil
Between 25 basis points 75
basis points
Straight-line pro rata vesting
between 50% and 100%
Above 75 basis points
100%
2024 brand sentiment performance rights (20% of award)
In response to CPS 511 requirements, the Board introduced
brand sentiment as a new performance hurdle in the LTI.
Brand sentiment is assessed as the change in Medibank’s
Customer Net Promoter Score over the performance period.
Customer Net Promoter Score is a key customer advocacy
metric that measures the likelihood of people recommending
Medibank or ahm to their families and friends.
The percentage of brand sentiment performance rights
that vest, if any, will be based on Medibank’s performance
against the brand sentiment hurdle over the performance
period, as set out in the following vesting schedule.
Medibank’s brand sentiment
(Customer Net Promotor
Score)
Percentage of brand
sentiment performance
rights that vest
Less than 4.6
Nil
Between 4.6 and 10.6
Straight-line pro rata vesting
between 50% and 100%
Above 10.6
100%
7. Linking remuneration and performance in 2024
7.1 2024 short-term incentive (STI) performance scorecard
Gateways
Both the Financial Gateway and the Risk, Compliance & Behaviour Gateway (in respect of each of the Executive KMP’s roles)
were met. The following table details the 2024 STI performance scorecard measures, weightings, and assessment.
Measure
Description
CEO
Executive
KMP1
2024
Outcomes
Group
operating
profit
Group operating profit represents the core financial measure for
the annual STI Plan and reflects the Board’s belief that it is the best
measure of underlying business performance and value created for
customers and shareholders over the performance period. Group
operating profit for the purposes of the 2024 STI is inclusive of
cybercrime event related expenses.
45%
35%
Above
threshold
Health Insurance
premium revenue
growth
Measured alongside the core metric of Group operating profit, the
focus of this measure is sustainable and profitable revenue growth
to ensure optimal value creation for customers and shareholders.
20%
25%
Above
threshold
Customer
service
satisfaction
Measured by Service NPS which is a key customer advocacy
metric that measures the likelihood of customers who have had
an interaction with the organisation, recommending Medibank
or ahm to their families and friends.
20%
20%
Stretch
Role-specific
big goals
Aligned to one or more of the following milestones:
1. Deliver leading experiences – Continue to achieve a high level
of customer and employee advocacy by creating personalised
and connected customer experiences, empowering our people
and collaborating with our communities to make a difference.
2. Differentiate our insurance business – We aim to achieve
market share and net policyholder growth (including growth
in the Medibank brand) and to deliver $20m productivity savings
in FY24-FY25 including $10m in FY24.
3. Expand in health – We aim to achieve at least 15% p.a. organic
segment profit growth and to invest $150m to $250m in total to
grow Medibank Health inorganically between FY24 and FY26
as suitable opportunities arise by focusing growth on prevention
and integrated care models, scaling and connecting our health
business and bringing benefits back to our core.
15%
20%
Ranging
between
above
threshold
to above
target
1. The weighting of performance measures for Andrew Wilson was Group Operating Profit 22.5%, Health Insurance premium revenue growth 15%,
customer service satisfaction 12.5% and role specific goals 50% during his time as an Executive KMP in FY24.
70 Medibank
7.2 Medibank’s 2024 financial performance
Medibank’s 2024 annual financial performance is provided in the table below in addition to the average 2024 STI award
achieved by Executive KMP, as a percentage of maximum opportunity. This table illustrates the relationship between the
key indicators of shareholder wealth creation and STI outcomes for Executive KMP.
Measure
2024
20231
2022
2021
2020
Health Insurance premium revenue growth
4.0%
4.2%
2.7%
2.1%
1.3%
Group operating profit1
$699.8m
$648.4m
$594.1m
$528.3m
$461.0m
Group net profit after tax (NPAT)
$492.5m
$308.6m
$393.9m
$441.3m
$315.0m
Dividend
16.6 cents p/s
14.6 cents p/s
13.4 cents p/s
12.7 cents p/s
12.0 cents p/s
Share price as at 1 July
$3.52
$3.25
$3.16
$2.99
$3.49
Share price as at 30 June
$3.73
$3.52
$3.25
$3.16
$2.99
Average Executive KMP STI as a percentage
of maximum opportunity
61%
0%
72%
70%
0%
1. The 2023 Group Operating Profit and NPAT have been restated to reflect the application of AASB 17 Insurance Contracts.
Remuneration outcomes were not revised.
7.3 2024 STI awards
The table below provides a summary of STI awards for the 2024 performance year.
Executive KMP
Target STI $
Total STI
achieved $
STI cash
(60%) $
STI deferred
(40%) $
Total STI
achieved as %
of target
Total STI achieved
as % of max
opportunity
David Koczkar
1,550,000
1,611,340
966,804
644,536
104%
69%
Milosh Milisavljevic
585,000
662,424
397,454
264,970
113%
61%
Robert Read1
288,750
302,533
181,520
121,013
105%
57%
Mark Rogers
695,500
787,548
472,529
315,019
113%
61%
Former Executive KMP
Andrew Wilson2
306,000
316,038
189,623
126,415
103%
56%
1. The 2024 STI outcome for Robert Read corresponds to the period from 13 November 2023 when he became an Executive KMP.
2. The 2024 STI outcome for Andrew Wilson corresponds to the period between 1 July 2023 and 18 December 2023 when he ceased to be an
Executive KMP.
7.4 2022 Long-term incentive plan outcomes
Medibank’s 2022 LTI was tested following the completion of the performance period on 30 June 2024. The Board determined
it was appropriate to allow the LTI to vest in line with the terms of its grant, with a vesting outcome of 63.7% The table below
outlines the outcomes against the EPS CAGR and Relative TSR performance hurdles. It is likely that there will be no vesting
against the market share growth measure, however this will be confirmed once APRA releases the June Quarterly private
health insurance statistics.
Performance hurdle
Weighting
Outcome
Vesting percentage
EPS CAGR
35%
12.6%
100%
Relative TSR
35%
66th Percentile
82%
Market Share
30%
TBC
TBC
Total 2022 LTI vesting percentage
63.7%
The performance rights under the 2022 LTI Plan that do not vest because of the performance hurdle outcomes not being
met will lapse immediately.
The 2023 and 2024 LTI plans remain in restriction and will be assessed against their performance hurdles at the completion
of the 2025 and 2026 financial years respectively.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 71
8. 2024 actual remuneration (Non-IFRS disclosure)
The table below represents the 2024 ‘actual’ remuneration for Executive KMP and includes all cash payments made in
relation to 2024, in addition to deferred short-term incentive (STI) and long-term incentive (LTI) awards that vested in 2024.
Statutory remuneration disclosures prepared in accordance with the Corporations Act 2001 (Cth) and Australian Accounting
Standards differ to the numbers presented below, as they include (among other benefits) expensing for equity grants that
are yet to realise or may never be realised. The statutory remuneration table for Executive KMP is presented in section 9.
Executive KMP
Base salary and
superannuation
$
Cash STI for
performance
to 30 June
2024 $
Total cash
payments in
relation to
2024 $
Deferred
equity awards
that vested in
20241 $
Total 2024
actual
remuneration
$
Equity awards
that lapsed in
20242 $
David Koczkar
1,550,000
966,804
2,516,804
1,357,517
3,874,321
285,099
Milosh Milisavljevic
897,528
397,454
1,294,982
409,245
1,704,227
59,303
Robert Read3
417,308
181,520
598,828
-
598,828
-
Mark Rogers
1,068,846
472,529
1,541,375
888,325
2,429,700
274,701
Former Executive KMP
Andrew Wilson4
510,000
189,623
699,623
867,335
1,566,958
285,099
1. Deferred equity awards that vested in 2024 relate to 2022 STI deferred performance rights (including shares allocated as dividend equivalent for the
deferral period as per plan rules) and 2021 LTI performance rights that vested during the year.
2. Equity awards that lapsed in 2024 relate to the portion of the 2021 long-term incentive (LTI) performance rights that lapsed following the testing of the
performance hurdles in July 2023.
3. The values for Robert Read correspond to the period from 13 November 2023 when he became an Executive KMP.
4. The values for Andrew Wilson correspond to the period between 1 July 2023 and 18 December 2023 while he was an Executive KMP.
9. Statutory remuneration tables
9.1 Statutory remuneration table
The following table has been prepared in accordance with Section 300A of the Corporations Act 2001 (Cth) and details
the statutory accounting expense of all remuneration-related items for Executive KMP. In contrast to the table in section 8
that details 2024 actual remuneration, the table below includes accrual amounts for equity awards being expensed
throughout 2024 that are yet to, and may never, be realised.
Short-term
benefits
Post-employment
benefits
Long-term
benefits
Equity-based
benefits
Other
Total
remuneration
$
Executive
KMP
Financial
year
Salary
$1
Short-term
incentive
(STI) $
Other
$
Non-monetary
benefits
$2
Superannuation
$
Leave
$3
Deferred
STI
$
Performance
rights
$4
Termination
benefits
$
David
Koczkar
2024
1,551,381
966,804
-
17,655
27,500
51,485
-
1,841,679
-
4,456,504
2023
1,536,560
-
-
18,082
27,500
59,869
-
1,616,992
-
3,259,003
Milosh
Milisavljevic
2024
872,912
397,454
-
17,498
27,500
120,780
-
496,071
-
1,932,215
2023
769,948
-
-
13,897
27,500
56,347
-
419,506
-
1,287,198
Robert
Read5
2024
416,942
181,520
-
9,388
40,994
10,070
-
158,294
-
817,208
2023
-
-
-
-
-
-
-
-
-
-
Mark Rogers
2024
1,042,713
472,529
-
18,888
27,480
124,875
-
496,608
-
2,183,093
2023
1,013,573
-
-
15,891
25,408
110,493
-
634,380
-
1,799,745
Former Executive KMP
Andrew
Wilson6
2024
488,348
189,623
-
11,072
12,726
1,084
-
127,421
-
830,274
2023
957,739
-
-
20,929
25,456
50,213
-
612,467
-
1,666,804
Total
Executive
KMP
2024
4,372,296
2,207,930
-
74,501
136,200
308,294
-
3,120,073
-
10,219,294
2023
4,277,820
-
-
68,799
105,864
276,922
-
3,283,345
-
8,012,750
1. Salary includes annual base salary paid on a fortnightly basis and annual leave entitlements accrued, but not taken, during the year which are
expected to be taken in the next 12 months.
2. Non-monetary benefits may include death, total and permanent disablement insurance, salary continuance insurance, subsidised Medibank
health insurance and fringe benefits that are on the same terms and conditions that are available to all employees of the Group.
3. Long-term leave comprises an accrual for long service leave and annual leave entitlements accrued, but not taken, during the year which are
not expected to be taken in the next 12 months.
4. Performance rights include equity-based remuneration incurred during the relevant financial year. The values are based on the grant date fair
value amortised on a straight-line basis over the performance period and any reversals required by AASB 2 Share-based Payments.
5. The values for Robert Read correspond to the period from 13 November 2023 when he became an Executive KMP.
6. The values for Andrew Wilson correspond to the period between 1 July 2023 and 18 December 2023 while he was an Executive KMP.
72 Medibank
9.2 Performance-related remuneration statutory table
The following table provides an analysis of the non-performance-related (fixed remuneration) and performance-related
(short-term incentive (STI) and long-term incentive (LTI)) components of the 2024 remuneration mix for Medibank’s Executive
KMP as detailed in the ‘statutory remuneration table’.
Non-performance-related
Performance-related
Total performance-related
remuneration
Executive KMP
Fixed remuneration1
Cash STI
Deferred STI2
LTI3
David Koczkar
37.0%
21.7%
7.2%
34.1%
63.0%
Milosh Milisavljevic
53.8%
20.6%
6.9%
18.7%
46.2%
Robert Read
58.4%
22.2%
7.4%
12.0%
41.6%
Mark Rogers
55.6%
21.6%
7.2%
15.6%
44.4%
Former Executive KMP
Andrew Wilson4
61.8%
22.8%
7.6%
7.8%
38.2%
1. Fixed remuneration includes the accounting expense from all columns of the ‘statutory remuneration table’ other than ‘cash STI’, ‘performance rights’
and ‘deferred STI’.
2. Deferred STI includes the 2024 accounting expense of the 2024 deferred STI component within the ‘performance rights’ column of the ‘statutory
remuneration table’.
3. LTI includes the 2024 accounting expense of the 2022, 2023 and 2024 LTI component within the ‘performance rights’ column of the ‘statutory
remuneration table’.
4. The values for Andrew Wilson correspond to the period between 1 July 2023 and 18 December 2023 while he was an Executive KMP.
10. Executive KMP equity awards
10.1 Executive KMP equity award transactions
Details of 2024 Executive KMP equity award transactions and outstanding holdings granted in previous years are set out below.
Acquired
during 20242
Vested
during 20243
Lapsed
during 20244
Other
changes
Balance
30 June 20245
Executive
KMP
Award type1
Balance
1 July 2023
Units
Value
Units
Value
Units
Value
Units
Value
David
Koczkar
Long-term incentive
1,654,311
653,088
1,795,992
128,726
471,137
77,896
285,099
-
2,100,777
5,020,423
Short-term incentive
240,566
14,875
51,616
255,441
886,380
-
-
-
-
-
Ordinary shares
1,042,597
-
-
384,167
1,357,517
-
-
-
1,426,764
5,321,830
Milosh
Milisavljevic
Long-term incentive
373,063
164,324
451,891
26,777
98,004
16,203
59,303
-
494,407
1,186,691
Short-term incentive
84,472
5,223
18,124
89,695
311,242
-
-
-
-
-
Ordinary shares
39,433
-
-
116,472
409,245
-
-
-
155,905
581,526
Robert
Read6
Long-term incentive
-
127,808
351,472
-
-
-
-
51,959
179,767
461,937
Short-term incentive
-
-
-
-
-
-
-
-
-
-
Ordinary shares
-
-
-
-
-
-
-
-
-
-
Mark
Rogers
Long-term incentive
617,648
195,364
537,251
124,033
453,961
75,055
274,701
-
613,924
1,469,473
Short-term incentive
117,888
7,289
25,293
125,177
434,364
-
-
-
-
-
Ordinary shares
554,918
-
-
249,210
888,325
-
-
-
804,128
2,999,397
Former Executive KMP
Andrew
Wilson7
Long-term incentive
622,125
186,234
512,144
128,726
471,137
77,896
285,099
(601,737)
-
-
Short-term incentive
107,529
6,649
23,072
114,178
396,198
-
-
-
-
-
Ordinary shares
1,168,960
-
-
242,904
867,335
-
-
(1,411,864)
-
-
1. Long-term incentive corresponds to performance rights awarded under the LTI plan that are subject to performance hurdles. Short-term incentive
represents performance rights awarded under the STI plan. Ordinary shares include all Medibank shares held by the executive or related parties.
2. Represents the maximum number of equity awards that may vest to each Executive in respect to their time as KMP during 2024. The minimum
potential outcome for the equity awards is 0. The values are calculated using the fair value as at grant date. The fair value at grant has been based
on a valuation by independent external consultants in accordance with accounting standard AASB 2 Share Based Payments. The fair values for
the 2022, 2023 and 2024 long-term incentive (LTI) grants are used for accounting purposes only as all LTI grants are made using the face value, as
outlined in section 6.4. Unit prices have been rounded to the nearest cent.
3. Awards that vested in 2024 relate to the 100% vesting of 2022 Deferred STI award (including shares allocated as dividend equivalent for the deferral
period as per plan rules) and the 62.3% vesting of 2021 LTI award (granted 26 November 2020) following the assessment of performance hurdles.
Performance rights that vested were automatically exercised and no payment was required from participants. Executives received one ordinary share
for each performance right that vested during the financial year. The value of vested awards is calculated using the closing share price on vesting date.
4. Awards that lapsed in 2024 relate to the 37.7% of the 2021 LTI award that did not meet the performance hurdle and subsequently lapsed.
5. The value of unvested STI is determined by the number of units at 30 June 2024 multiplied by the unit price at grant. The value of unvested LTI is
determined by the number of units at 30 June 2024 multiplied by the fair value at grant. The value of ordinary shares is determined by multiplying
the number of ordinary shares at 30 June 2024 by the closing price of Medibank shares on the same date.
6. Robert Read’s equity award acquired during 2024 corresponds to equity awards granted following his commencement as an Executive KMP on
13 November 2023. Other changes correspond to equity awards granted prior to becoming an Executive KMP.
7. Andrew Wilson ceased to be a KMP on 18 December 2023 and therefore Andrew’s unvested balance as at 30 June 2024 has been adjusted to
reflect no further holdings as an Executive KMP.
Remuneration report
For the financial year ended 30 June 2024
Annual Report 2024 73
10.2 Overview of unvested equity awards and fair value assumptions
All awards are subject to continued employment, malus and clawback provisions.
Award
Award
type
Performance
start date
Performance
end date1 Grant date
Performance
measure
Weighting
Unit price
at grant
Fair value
at grant2
2024 LTI
performance rights
LTI
1/07/2023
30/06/2026
11/12/2023
EPS
30%
3.56
3.16
Market share
20%
3.56
3.16
TSR
30%
3.56
1.78
Brand Sentiment
20%
3.56
3.16
2023 LTI
performance rights
LTI
1/07/2022
30/06/2025
6/12/2022
EPS
35%
3.19
2.63
Market Share
30%
3.19
2.63
TSR
35%
3.19
1.19
2022 Deferred STI
performance rights
STI
1/07/2022
15/09/2023
6/12/2022
Service
100%
3.58
3.58
2022 LTI
performance rights
LTI
1/07/2021
30/06/2024
3/12/2021
EPS
35%
3.13
2.72
Market share
30%
3.13
2.72
TSR
35%
3.13
1.62
2021 Deferred STI
performance rights
STI
1/07/2021
15/09/2022
3/12/2021
Service
100%
3.55
3.55
2021 LTI
performance rights
LTI
1/07/2020
30/06/2023
26/11/2020
EPS
35%
3.02
2.54
Market Share
30%
3.02
2.54
TSR
35%
3.02
1.58
1. The performance end date represents the earliest possible date the performance rights may vest, being the end of the performance period.
The actual vesting and exercise date will be at a time and manner determined by the Board, with Medibank to notify the holder at that time.
– FY22 – FY23 LTI: Performance rights that vest are automatically exercised and no payment is required from participants. Any performance
rights that don’t vest at this point will immediately expire.
– FY24 LTI: Following the three-year performance period any performance rights that meet the performance hurdles vest and are then subject
to a deferral period of up to three years for the CEO and up to two years for other KMP. Any performance rights that don’t vest will immediately
expire. Performance rights that meet the deferral conditions are automatically exercised and no payment is required from participants.
2. Fair value of LTI performance rights has been calculated as at the start of the performance period.
11. Non-executive director remuneration and framework
Non-executive director fees are determined by the Board
and reflect the role, market benchmarks and Medibank’s
objective to attract highly skilled and experienced
independent non-executive directors. All non-executive
directors are required to hold a minimum number of shares
in Medibank to align with shareholder interests.
11.1 Non-executive director remuneration
Component
Delivered
Description
Base fee
Cash and
superannuation
The base fee represents
remuneration for service
on the Medibank Board.
The base fee for the Chair
represents the entire
remuneration for that role.
Committee
fees
Cash and
superannuation
Committee fees represent
remuneration for chairing,
or membership of, Board
committees.
11.1.1 Non-executive director fee cap
Under Medibank’s Constitution, the total fees paid in any
financial year to all non-executive directors for their services
(excluding, for these purposes, the salary of any executive
director) must not exceed, in aggregate, the amount fixed
at Medibank’s annual general meeting in 2018 at $2,300,000
per annum (fee cap).
11.1.2 Non-executive director remuneration
Under Medibank’s Constitution, the Board is responsible for
determining the total amount paid to each non-executive
director as remuneration for their services. In making this
determination, the Board has taken into account the level
of work required for the role and has regard to the median
remuneration paid to non-executive directors of companies
positioned within the ASX 11-100 (excluding mining and
energy companies).
Following the annual benchmarking exercise and the
position of non-executive directors against the median of
the benchmark group, non-executive director base and
committee fees have been increased by 4.25% for 2025.
Based on the composition of the Board, non-executive
director fee spend for 2025 will be $2,105,050 against the
approved cap of $2,300,000.
74 Medibank
Non-executive director fees applicable throughout 2024
and 2025 are set out in the table below:
Position
2024 $
2025 $
Chair
458,500
478,000
Non-executive directors
170,000
177,250
Committee chair fees
Audit Committee
41,200
42,950
Risk Management Committee
41,200
42,950
People and Remuneration Committee
41,200
42,950
Investment and Capital Committee
41,200
42,950
Committee membership fees
Audit Committee
20,600
21,450
Risk Management Committee
20,600
21,450
People and Remuneration Committee
20,600
21,450
Investment and Capital Committee
20,600
21,450
11.2 Non-executive director superannuation
Medibank meets its obligations under the Superannuation
Guarantee legislation by paying superannuation contributions
in respect of non-executive directors to their nominated
complying superannuation funds up to the concessional
contribution limits. Superannuation contributions for non-
executive directors are drawn from the overall fees paid
to non-executive directors.
As permitted under the Superannuation Guarantee legislation,
people with multiple employers can elect to be exempt from
the superannuation guarantee where contributions are likely
to take them over the annual concessional contribution
cap. If a non-executive director applies and receives an
exemption from superannuation guarantee payments,
Medibank will make those payments in cash.
11.3 Shareholding policy for non-executive directors
Medibank has a Minimum Shareholding Policy that requires
non-executive directors to acquire shares with a value equal
to one year’s base fee after tax over a period of five years.
Non-executive directors do not participate in, or receive,
any performance-based remuneration as part of their role
and do not participate in any equity plans that operate
within Medibank.
As at 30 June 2024, all non-executive directors have met the
minimum shareholding requirement. Further details of current
non-executive director shareholdings are provided in section 13.
To further align interests of non-executive directors with
those of shareholders, effective 1 July 2024, non-executive
directors will be required to have a shareholding in the
company equal in value to at least one year of their pre-tax
base fee. Non-executive directors will have five years from
the effective date of this change to attain the new required
shareholding level.
Remuneration report
For the financial year ended 30 June 2024
12. 2024 non-executive director remuneration statutory table
Short-term
benefits
Post-employment
benefits
Total
$
Non-executive director
Financial
year
Cash salary and fees
$
Non-monetary1
$
Superannuation
$
Mike Wilkins
2024
458,500
5,087
-
463,587
2023
453,452
4,818
6,812
465,082
Tracey Batten
2024
208,793
3,039
23,008
234,840
2023
210,549
2,792
22,143
235,484
Gerard Dalbosco
2024
231,800
3,254
-
235,054
2023
209,840
2,747
22,851
235,438
Peter Everingham
2024
191,665
3,533
21,120
216,318
2023
191,837
3,315
20,175
215,327
David Fagan
2024
208,793
3,610
23,008
235,411
2023
210,548
3,118
22,143
235,809
Kathryn Fagg
2024
190,237
155
20,963
211,355
2023
191,837
143
20,175
212,155
Linda Bardo Nicholls
2024
231,800
3,255
-
235,055
2023
232,691
2,812
-
235,503
Jay Weatherill2
2024
54,886
-
6,037
60,923
2023
-
-
-
-
Former non-executive directors
Anna Bligh3
2024
75,343
5,647
8,325
89,315
2023
191,837
3,343
20,175
215,355
Total non-executive
director remuneration
2024
1,851,817
27,580
102,461
1,981,858
2023
1,892,591
23,088
134,474
2,050,153
1. Non-monetary benefits may include death, total and permanent disablement insurance, salary continuance insurance, subsidised Medibank
health insurance and fringe benefits that are on the same terms and conditions that are available to all Medibank employees.
2. Jay Weatherill’s 2024 remuneration reflects his commencement date as non-executive director of 18 March 2024.
3. Anna Bligh’s 2024 remuneration reflects her retirement date from the Medibank Board of 22 November 2023.
Annual Report 2024 75
13. Non-executive director ordinary shareholdings
Non-executive
director
Balance
30 June
2023
Acquired
during the
year
Other
changes
Balance
30 June
2024
Minimum
shareholding
requirement $1
Shareholding
value at 30 June
2024 $2
Minimum
shareholding
requirement timeline
Mike Wilkins
100,000
-
-
100,000
229,250
373,000 Requirement satisfied
Tracey Batten
50,000
-
-
50,000
85,000
186,500 Requirement satisfied
Gerard Dalbosco
72,832
-
-
72,832
85,000
271,663 Requirement satisfied
Peter Everingham
40,000
-
-
40,000
85,000
149,200 Requirement satisfied
David Fagan
47,016
-
-
47,016
85,000
175,370 Requirement satisfied
Kathryn Fagg
32,750
-
-
32,750
85,000
122,158 Requirement satisfied
Linda Bardo Nicholls
45,000
5,400
-
50,400
85,000
187,992 Requirement satisfied
Jay Weatherill3
-
-
11,600
11,600
85,000
43,268
18 March 2029
Former non-executive director
Anna Bligh4
44,623
-
(44,623)
-
-
-
Not applicable
1. Minimum shareholding requirement based on annual non-executive director base fees for 2024 and an assumed tax rate of 50%. Effective 1 July 2024,
non-executive directors will be required to have a shareholding in the company equal in value to at least one year of their pre-tax base fee.
2. Value has been calculated with reference to the total number of eligible shares held by each non-executive director, multiplied by the closing price
of Medibank’s shares on 30 June 2024 ($3.73).
3. Jay Weatherill commenced as a non-executive director on 18 March 2024, and therefore his balance at 30 June 2023 was zero. Other changes
correspond to Medibank shares acquired prior to commencing as a non-executive director.
4. Anna Bligh ceased to be a KMP on 22 November 2023 and therefore her balance at 30 June 2024 has been adjusted to reflect no further holdings
as a KMP.
14. Medibank’s comparator group
As outlined throughout this report, Medibank uses a
comparator group for the purposes of benchmarking
executive and non-executive director remuneration and for
the assessment of Medibank’s relative total shareholder return
(TSR) performance under its long-term incentive (LTI) plan.
Medibank’s comparator group is the ASX 11-100, excluding
mining and energy companies. In any given year, there may
be changes in the mining and energy companies excluded
from Medibank’s comparator group due to companies either
falling outside the ASX 11-100 or companies no longer being
considered exclusively as a mining or energy company.
15. Loans and other transactions with KMP
During 2023 and 2024 there were no loans to KMP or any
of their related parties. Certain key management personnel
hold director positions in other entities, some of which
transacted with the Group during the current and prior
reporting periods. All transactions that occurred were in the
normal course of business on terms and conditions no more
favourable than those available on an arm’s length basis.
This report is made in accordance with a resolution of
the directors.
Mike Wilkins AO
David Koczkar
Chair
Chief Executive Officer
22 August 2024
Melbourne
76 Medibank
Financial report
Consolidated financial
statements
Consolidated statement of comprehensive income
77
Consolidated statement of financial position
78
Consolidated statement of changes in equity
79
Consolidated statement of cash flows
80
Notes to the
financial statements
Section 1
Basis of
preparation
81
Section 2
Operating
performance
82
Section 3
Investment portfolio
and capital
90
Section 4
Other assets
and liabilities
99
Section 5
Other
107
1. Basis of
preparation
2. Segment
information
3. Other operating
expenses
4. Insurance
contracts
5. Shareholder
returns
6. Investment
portfolio
7. Financial risk
management
8. Equity
9. Property, plant
and equipment
10. Intangible assets
11. Provisions and
employee
entitlements
12. Contingencies
13. Leases
14. Reconciliation of
profit after income
tax to net cash flow
from operating
activities
15. Income tax
16. Group structure
17. Related party
transactions
18. Share-based
payments
19. Auditor’s
remuneration
20. Other
Other
Consolidated entity disclosure statement
118
Signed reports
Directors’ declaration
120
Auditor’s independence declaration
121
Independent auditor’s report
122
Annual Report 2024 77
Consolidated statement of comprehensive income
For the financial year ended 30 June 2024
Note
2024
$m
2023
(restated)
$m
Insurance revenue
2(b) 4(a)
7,623.1
7,086.4
Insurance service expenses
Incurred claims
4(a)
(6,289.3)
(6,057.1)
Other insurance service expenses
3
(619.5)
(566.6)
(6,908.8)
(6,623.7)
Insurance service result
714.3
462.7
Other operating revenue
2(b)
222.8
173.3
Other expenses
3
(400.5)
(335.3)
Share of net profit/(loss) from equity accounted investments
16(b)
(7.1)
(1.4)
Profit before net investment income and income tax
529.5
299.3
Net investment income
6(a)
182.2
138.6
Profit for the year before income tax
711.7
437.9
Income tax expense
15(a)
(215.3)
(129.3)
Profit for the year
496.4
308.6
Total comprehensive income for the year, net of tax
496.4
308.6
Profit and total comprehensive income for the year attributable to:
Equity holders of the parent entity
492.5
308.6
Non-controlling interests
3.9
-
496.4
308.6
Note
cents
cents
Earnings per share attributable to ordinary equity holders of the parent entity -
basic and diluted
5(b)
17.9
11.2
The above statement should be read in conjunction with the accompanying notes.
The Group has adopted AASB 17 Insurance Contracts and has restated the comparative periods. The impacts of adoption
are detailed in Note 20.
78 Medibank
Consolidated statement of financial position
As at 30 June 2024
Note
30 June 2024
$m
30 June 2023
(restated)
$m
1 July 2022
(restated)
$m
Current assets
Cash and cash equivalents
691.0
420.6
596.7
Trade and other receivables
39.5
41.2
35.0
Financial assets at fair value
6(b)
3,048.2
2,866.8
2,854.5
Tax receivable
-
97.8
-
Other assets
27.6
25.9
19.3
Total current assets
3,806.3
3,452.3
3,505.5
Non-current assets
Property, plant and equipment
9
205.0
70.5
88.4
Intangible assets
10
467.0
328.1
332.3
Deferred tax assets
15(c)
142.1
62.4
88.5
Equity accounted investments
16(b)
58.7
117.6
103.7
Other assets
6.3
3.5
6.0
Total non-current assets
879.1
582.1
618.9
Total assets
4,685.4
4,034.4
4,124.4
Current liabilities
Trade and other payables
145.4
99.8
92.5
Lease liabilities
13(a)
31.7
30.9
30.2
Borrowings
7(c)
34.9
-
-
Insurance contract liabilities
4(a)
1,636.1
1,370.1
1,312.2
Tax liability
48.7
-
117.0
Provisions and employee entitlements
11
118.0
94.0
104.6
Total current liabilities
2,014.8
1,594.8
1,656.5
Non-current liabilities
Trade and other payables
18.4
15.0
9.9
Lease liabilities
13(a)
151.7
24.4
46.7
Insurance contract liabilities
4(a)
165.8
135.9
80.8
Provisions and employee entitlements
11
29.6
20.6
23.1
Total non-current liabilities
365.5
195.9
160.5
Total liabilities
2,380.3
1,790.7
1,817.0
Net assets
2,305.1
2,243.7
2,307.4
Equity
Contributed equity
8(a)
85.0
85.0
85.0
Reserves
8(b)
152.3
233.5
434.3
Retained earnings
2,068.4
1,925.2
1,788.1
Total equity (attributable to equity holders of the parent entity)
2,305.7
2,243.7
2,307.4
Non-controlling interests
(0.6)
-
-
Total equity
2,305.1
2,243.7
2,307.4
The above statement should be read in conjunction with the accompanying notes.
The Group has adopted AASB 17 Insurance Contracts and has restated the comparative periods. The impacts of adoption
are detailed in Note 20.
Annual Report 2024 79
Consolidated statement of changes in equity
For the financial year ended 30 June 2024
Total equity (attributable to equity holders
of the parent entity)
Non-
controlling
interests
$m
Total
equity
$m
Note
Contributed
equity
$m
Reserves
$m
Retained
earnings
$m
Total
$m
Balance at 1 July 2022 (as previously reported)
85.0
25.7
1,834.9
1,945.6
-
1,945.6
Adjustment on initial application of AASB 17,
net of tax
-
408.6
(46.8)
361.8
-
361.8
Balance at 1 July 2022 (restated)
85.0
434.3
1,788.1 2,307.4
- 2,307.4
Profit for the year
-
-
308.6
308.6
-
308.6
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the year
-
-
308.6
308.6
-
308.6
Dividends paid
5(a)(i)
-
-
(374.5)
(374.5)
-
(374.5)
Movement in COVID-19 reserve, net of tax
8(b)(i)
-
(203.0)
203.0
-
-
-
Acquisition and settlement of share-based
payment, net of tax
-
(4.5)
-
(4.5)
-
(4.5)
Share-based payment transactions
-
6.7
-
6.7
-
6.7
Balance at 30 June 2023 (restated)
85.0
233.5
1,925.2 2,243.7
- 2,243.7
Profit for the year
-
-
492.5
492.5
3.9
496.4
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income for the year
-
-
492.5
492.5
3.9
496.4
Dividends paid
5(a)(i)
-
-
(426.9)
(426.9)
(2.9)
(429.8)
Movement in COVID-19 reserve, net of tax
8(b)(i)
-
(77.6)
77.6
-
-
-
Non-controlling interest from acquisition
of subsidiary
16(b)(i)
-
-
-
-
(1.3)
(1.3)
Other movements in non-controlling
interests
-
-
-
-
(0.3)
(0.3)
Acquisition and settlement of share-based
payment, net of tax
-
(6.9)
-
(6.9)
-
(6.9)
Share-based payment transactions
-
3.3
-
3.3
-
3.3
Balance at 30 June 2024
85.0
152.3
2,068.4 2,305.7
(0.6) 2,305.1
The above statement should be read in conjunction with the accompanying notes.
The Group has adopted AASB 17 Insurance Contracts and has restated the comparative periods. The impacts of adoption
are detailed in Note 20.
80 Medibank
Consolidated statement of cash flows
For the financial year ended 30 June 2024
Note
2024
$m
2023
$m
Cash flows from operating activities
Premium receipts
7,910.3
7,148.1
Medibank Health receipts
246.5
192.4
Other receipts
1.1
4.5
Payments for claims and levies
(6,271.0)
(5,996.4)
Payments to suppliers and employees
(886.2)
(846.5)
Income taxes paid
(132.2)
(317.6)
Net cash inflow from operating activities
14
868.5
184.5
Cash flows from investing activities
Interest received
119.9
71.2
Investment management expenses
(4.8)
(5.0)
Proceeds from sale of financial assets
1,377.0
1,761.2
Purchase of financial assets
(1,492.6)
(1,703.6)
Purchase of equity accounted investments
16(b)
(15.5)
(25.9)
Payments for the purchase of businesses, net of cash acquired
16(b)
(37.2)
-
Dividends received from equity accounted investments
16(b)
-
2.5
Purchase of plant and equipment
(7.0)
(7.8)
Purchase of intangible assets
(50.6)
(34.1)
Net cash inflow/(outflow) from investing activities
(110.8)
58.5
Cash flows from financing activities
Purchase of shares to settle share-based payment
(7.5)
(4.9)
Lease principal and interest payments
13
(48.7)
(39.7)
Borrowings repayments
7(c)
(1.3)
-
Dividends paid to non-controlling interests
(2.9)
-
Dividends paid to equity holders of the parent entity
5(a)(i)
(426.9)
(374.5)
Net cash outflow from financing activities
(487.3)
(419.1)
Net increase/(decrease) in cash and cash equivalents
270.4
(176.1)
Cash and cash equivalents at beginning of the year
420.6
596.7
Cash and cash equivalents at end of the year
691.0
420.6
The above statement should be read in conjunction with the accompanying notes.
Annual Report 2024 81
Notes to the consolidated financial statements
30 June 2024
Section 1: Basis of preparation
Note 1. Basis of preparation
Overview
This section outlines the basis on which the Group’s financial statements are prepared. Specific accounting policies
are described in the note to which they relate.
(a) Corporate information
Medibank Private Limited (“Medibank”) is a for-profit
company incorporated in Australia, whose shares are
publicly traded on the Australian Securities Exchange (ASX).
The financial statements of Medibank for the financial
year ended 30 June 2024 were authorised for issue in
accordance with a resolution of the directors on
22 August 2024. The directors have the power to amend
and reissue the financial statements.
(b) Basis of preparation
The financial statements are general purpose financial
statements which:
• Are for the consolidated entity (“the Group”) consisting
of Medibank (“parent entity”) and its subsidiaries.
• Have been prepared in accordance with Australian
Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards
Board (AASB), International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards
Board (IASB) and the Corporations Act 2001.
• Have been prepared under the historical cost convention,
with the exception of financial assets measured at fair
value.
• Are presented in Australian dollars, which is Medibank’s
functional and presentation currency.
• Have been rounded in accordance with ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 to the nearest hundred thousand
dollars unless otherwise stated.
• Adopt all new and amended accounting standards that
are mandatory for 30 June 2024 reporting periods, but
do not apply any pronouncements before their operative
date. Refer to Note 20 for further information.
Where necessary, comparative financial information has
been updated for changes in classification of amounts in
the current reporting period, including to reflect the
adoption of AASB 17 Insurance Contracts.
(c) Basis of consolidation
The consolidated financial statements incorporate the
assets and liabilities of all entities controlled by Medibank
as at 30 June 2024 and the results for the financial year then
ended. In preparing the consolidated financial statements,
all transactions between controlled entities are eliminated in
full. When control of an entity commences or ceases during
a financial year, the results are included for that part of the
year during which control existed. Refer to Note 16(b) for
further information on acquisitions during the period and
Note 16 for the summary group structure.
(d) Critical accounting estimates and judgements
The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise judgement in the process of
applying the Group’s accounting policies. The areas
involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to
the financial statements, are disclosed in the following notes:
• Note 4: Insurance contracts.
• Note 10: Intangible assets.
• Note 12: Contingent liabilities.
82 Medibank
Section 2: Operating performance
Overview
This section explains the operating results of the Group for the year, and provides insights into the Group’s result by
reference to key areas, including:
• Results by operating segment
• Other operating expenses
• Insurance service result
• Shareholder returns
Note 2. Segment information
Segment Reporting Accounting Policy
Operating segments are identified based on the separate financial information that is regularly reviewed by the
Chief Operating Decision Maker (CODM). The term CODM refers to the function performed by the Chief Executive
Officer (CEO) in assessing performance and determining the allocation of resources across the Group.
(a) Description of segments
Segment information is reported on the same basis as the
Group’s internal management reporting structure at the
reporting date. Transactions between segments are carried out
on an arm’s length basis and are eliminated on consolidation.
The Group is not reliant on any one major customer.
For the financial year ended 30 June 2024, the Group
was organised for internal management reporting
purposes into two reportable segments, Health
Insurance and Medibank Health.
Health Insurance
Offers private health insurance products including hospital
cover and ancillary cover, as stand-alone products or
packaged products that combine the two. Hospital cover
provides members with health cover for hospital treatments,
whereas ancillary cover provides members with health
cover for healthcare services such as dental, optical and
physiotherapy. The segment also offers health insurance
products to overseas visitors and overseas students.
Health insurance revenue recognition accounting policy
Insurance revenue is the amount of expected premium
receipts allocated over the coverage period. For
contracts of one year or less the allocation is based on
the passage of time. For other contracts, the allocation
reflects the expected pattern of risk. Adjustments made
to past premiums are recognised as a reduction in
insurance revenue.
Medibank Health
Derives its revenue from a range of activities including
contracting with government and corporate customers to
provide health management and in-home care services,
as well as providing a range of telehealth and primary care
services in Australia. In addition, the Group distributes
travel, life and pet insurance products on behalf of other
insurers as part of a broader strategy to retain members
and leverage its distribution network.
Medibank Health revenue recognition accounting policy
Medibank Health revenue is reported within Other
operating revenue and is recognised when services are
provided to the customer and at an amount the Group
will be entitled to receive in relation to providing the
services. A contract liability is recognised within trade
and other payables in the consolidated statement of
financial position when the Group has an obligation to
transfer services to a customer for which it has already
received consideration from the customer (or an amount
of consideration is receivable). Contract liabilities are
recognised as revenue when the services are provided.
Notes to the consolidated financial statements
30 June 2024
Annual Report 2024 83
(b) Segment information provided to the CEO
The CEO measures the performance of the Group's reportable segments based on the operating profit of the segments.
The segment information provided to the CEO for the year ended 30 June 2024 is as follows.
2024
Note
Health Insurance
$m
Medibank Health
$m
Total
$m
Revenue
Total segment revenue
(i)
7,903.0
360.1
8,263.1
Inter-segment revenue
-
(87.3)
(87.3)
Revenue from external customers
7,903.0
272.8
8,175.8
Operating profit
692.3
60.4
752.7
Items included in segment operating profit:
Depreciation and amortisation
(64.3)
(21.2)
(85.5)
Interest income from loans to associates
-
0.3
0.3
Share of net profit/(loss) from equity accounted investments
16(b)
-
(4.1)
(4.1)
2023
(restated)
Note
Health Insurance
$m
Medibank Health
$m
Total
$m
Revenue
Total segment revenue
(i)
7,600.4
277.1
7,877.5
Inter-segment revenue
-
(70.5)
(70.5)
Revenue from external customers
7,600.4
206.6
7,807.0
Operating profit
651.3
44.2
695.5
Items included in segment operating profit:
Depreciation and amortisation
(64.4)
(9.3)
(73.7)
Interest income from loans to associates
-
0.2
0.2
Share of net profit/(loss) from equity accounted investments
16(b)
-
(0.2)
(0.2)
(i) Segment health insurance revenue is after $50.0 million (2023: $33.3 million) of transfers between the Group’s other operating segments in relation
to the loyalty program and excludes insurance revenue related movements in the COVID-19 reserve which comprise the premium deferral cost of
$39.9 million (2023: $209.4 million) and cash give back cost of $290.0 million (2023: $337.9 million).
(c) Other segment information
(i) Segment operating profit or loss
A reconciliation of segment operating profit to the profit for the year before income tax of the Group is as follows:
Note
2024
$m
2023
(restated)
$m
Total segment operating profit
752.7
695.5
Unallocated to operating segments:
Corporate operating expenses
(52.9)
(47.1)
Group operating profit
699.8
648.4
Net investment income
6(a)
182.2
138.6
Cybercrime expenses
(i)
(39.8)
(46.4)
Other income/(expenses)
(ii)
(19.7)
(12.6)
Movement in COVID-19 reserve
(iii)
(110.8)
(290.1)
Profit for the year before income tax
711.7
437.9
(i) Expenses incurred in relation to the Group’s cybercrime event of $39.8 million (2023: $46.4 million). These costs include office and administration
expense of $17.4 million (2023: $22.0 million), employee benefits expense of $13.4 million (2023: $15.6 million), information technology expense of
$9.0 million (2023: $7.6 million) and nil marketing expense (2023: $1.2 million). Refer to Note 12 for further information.
(ii) Other income/(expenses) of $19.7 million (2023: $12.6 million) is comprised of mergers and acquisition expenses of $3.8 million (2023: $1.4 million),
non-cash adjustment on step-acquisition of the Myhealth Medical Group of $(2.9) million (refer to Note 16(b) for further information), net sublease
rent, acquisition intangible amortisation and interest on lease liabilities.
(iii) Movement in the COVID-19 reserve is not included within Segment operating profit. Refer to Note 8(b) for further details.
84 Medibank
(ii) Segment assets and segment liabilities
No information regarding segment assets and segment liabilities has been disclosed, as these amounts are not reported to
the CEO for the purpose of making strategic decisions.
(iii) Geographic information
Segment revenue based on the geographical location of customers has not been disclosed, as the Group derives all of its
revenues from its Australian operations.
Note 3: Other operating expenses
The table below provides an analysis of other operating expenses incurred by the Group. Other operating expenses excludes
incurred claims, net investment income and income tax expense.
2024
$m
2023
(restated)
$m
Medical services expense
(38.0)
(27.6)
Employee benefits expense1
(508.0)
(455.5)
Office and administration expense
(123.3)
(108.8)
Marketing and commissions expense
(172.2)
(150.6)
Information technology expense
(85.3)
(78.1)
Depreciation and amortisation expense
(89.4)
(79.5)
Finance expense
(3.8)
(1.8)
Other expenses
(1,020.0)
(901.9)
1. Includes superannuation expense of $38.1 million (2023: $33.0 million).
Note 4: Insurance contracts
This note provides information on the Group’s insurance contracts, including the Group’s insurance service result
and insurance contract liabilities. Refer to Note 20 for details of the impact of adopting AASB 17.
Insurance Contracts Accounting Policy
An insurance contract arises when the Group accepts
significant insurance risk from another party by agreeing
to compensate them from the adverse effects of a
specified uncertain future event. The significance of
insurance risk depends on both the probability and
magnitude of an insurance event.
Once insurance cover has been classified as an
insurance contract, it remains an insurance contract for
the remainder of its lifetime, even if the insurance risk
significantly reduces during the period. With the exception
of travel, life and pet insurance, for which the Group does
not act as an underwriter, all other types of insurance
cover are insurance contracts.
Notes to the consolidated financial statements
30 June 2024
The Group applies the premium allocation approach (PAA)
for the measurement of its insurance contracts. The carrying
amount of a group of insurance contracts at the end of
each reporting period is the sum of the liability for remaining
coverage (LFRC) and the liability for incurred claims (LFIC).
The LFRC represents the Group’s obligation to provide future
insurance services in relation to contracts recognised at the
reporting date. This is the equivalent of unearned premium
liability, net of any premiums receivable under the previously
applicable AASB 1023 General Insurance Contracts. Under
the PAA the LFRC is measured as premiums received less
amounts recognised as insurance revenue for coverage that
has already been provided.
The LFIC represents the present value of the estimated
future payments arising from claims incurred at the end of
each reporting period under insurance cover issued by the
Medibank health insurance fund and other incurred insurance
service expenses. This replaces the outstanding claims
liability, including any claims payables, under the previously
applicable AASB 1023 General Insurance Contracts.
The Group has announced various customer give backs as
part of its commitment to return permanent net COVID-19
savings to policyholders. The treatment of these differs
depending on the mechanism used to provide the give
back to policyholders. Where a premium deferral has
been provided, the reduced premium received from
policyholders is recognised in the consolidated statement
of comprehensive income on a passage of time basis over
the policy coverage period. Customer give backs that are
provided as one-time cash payments have been recognised
within the LFIC when the Group formally announces the
give back, with a corresponding reduction to insurance
revenue in the consolidated statement of comprehensive
income. The provision is utilised as amounts are returned
to policyholders. A provision of $293.0 million (2023: $136.1
million) has been recognised in the LFIC at 30 June 2024 in
relation to customer give backs.
Annual Report 2024 85
(a) Insurance service result
The insurance service result includes insurance revenue,
offset by directly attributable insurance service expenses.
Insurance revenue reflects the consideration the Group
expects to be entitled to in exchange for providing insurance
contract services. Insurance service expenses include
expenses that are directly attributable to fulfilling a group
of insurance contract and include claims incurred, other
directly attributable insurance service expenses and
changes to past service. Other expenses not meeting
the above categories are included in other operating
expenses in the consolidated statement of profit and loss.
Note
2024
$m
2023
(restated)
$m
Insurance revenue
7,623.1
7,086.4
Insurance service expenses
Claims incurred
(i)
(6,251.3)
(5,944.7)
Changes relating to past service
46.5
13.6
Movement in risk adjustment for non-financial risk
2.6
(20.2)
Net Risk Equalisation Special Account payments
(29.3)
(36.8)
State levies
(62.4)
(67.0)
Incurred claims, excluding claims handing costs
(6,293.9)
(6,055.1)
Movement in claims handling costs for incurred claims
4.6
(2.0)
Incurred claims
(ii)
(6,289.3)
(6,057.1)
Other insurance service expenses
(619.5)
(566.6)
Total insurance service expenses
(6,908.8)
(6,623.7)
Insurance service result
714.3
462.7
(i) Claims incurred are after the elimination of transactions with the Group’s other operating segments of $82.8 million
(2023: $68.2 million).
(ii) Incurred claims consist of amounts paid and payable to hospital, medical and ancillary providers which consists of
claims paid and payable, changes in claims liabilities, change in amounts receivable from and payable to the Risk
Equalisation Special Account, applicable state levies and costs incurred in health management services. Incurred
claims comprise actual claims and is not adjusted for movements in COVID-19 reserve.
Health insurance revenue recognition accounting policy
Insurance revenue is the amount of expected premium
receipts allocated over the coverage period. For
contracts of one year or less the allocation is based on
the passage of time. For other contracts, the allocation
reflects the expected pattern of risk. Adjustments made
to past premiums are recognised as a reduction in
insurance revenue.
The Australian Government contributes a rebate
towards eligible policyholder’s premium and pays this
directly to the Group. This rebate is recognised within
insurance revenue in the consolidated statement of
comprehensive income.
Net Risk Equalisation Special Account levies and
rebates accounting policy
Under legislation, all private health insurers must
participate in the Risk Equalisation Special Account in
which all private health insurers share the cost of the
eligible claims of members aged 55 years and over, and
claims meeting the high cost claim criteria.
The Australian Prudential Regulation Authority (APRA)
determines the amount payable to or receivable from the
Risk Equalisation Special Account after the end of each
quarter. Estimates of amounts payable or receivable are
provided in the LFIC for periods where determinations
have not yet been made. This includes an estimate of risk
equalisation for unpresented and outstanding claims.
86 Medibank
Notes to the consolidated financial statements
30 June 2024
(b) Reconciliation of movement in insurance contract liabilities
The table below provides an analysis of the movement in the net carrying amounts of insurance contract liabilities.
2024
2023
Liability for incurred claims
Liability for incurred claims
Note
Liability for
remaining
coverage
$m
Present
value of
future cash
flows
$m
Risk
adjustment for
non-financial
risk
$m
Total
insurance
contract
liabilities
$m
Liability for
remaining
coverage
$m
Present
value of
future cash
flows
$m
Risk
adjustment for
non-financial
risk
$m
Total
insurance
contract
liabilities
$m
Insurance contract liabilities
at 1 July
690.7
759.6
55.7
1,506.0
587.7
769.8
35.5
1,393.0
Insurance revenue
(7,623.1)
-
-
(7,623.1)
(7,086.4)
-
-
(7,086.4)
Insurance service expenses
Claims incurred
4(a)(i)
-
6,251.3
(2.6)
6,248.7
-
5,944.7
20.2
5,964.9
Changes relating to past service
-
(46.5)
-
(46.5)
-
(13.6)
-
(13.6)
Net Risk Equalisation
Special Account payments
-
29.3
-
29.3
-
36.8
-
36.8
State levies
-
62.4
-
62.4
-
67.0
-
67.0
Incurred claims, excluding
claims handing costs
-
6,296.5
(2.6)
6,293.9
-
6,034.9
20.2
6,055.1
Movement in claims handling
costs for incurred claims
-
(4.6)
-
(4.6)
-
2.0
-
2.0
Incurred claims
4(a)(ii)
-
6,291.9
(2.6)
6,289.3
-
6,036.9
20.2
6,057.1
Other insurance service
expenses
-
619.5
-
619.5
-
566.6
-
566.6
Total insurance service expenses
-
6,911.4
(2.6)
6,908.8
-
6,603.5
20.2
6,623.7
Insurance service result
(7,623.1)
6,911.4
(2.6)
(714.3)
(7,086.4)
6,603.5
20.2
(462.7)
Other movements
4(b)(i)
(166.8)
157.2
-
(9.6)
41.3
(50.7)
-
(9.4)
Cash flows
Premium receipts
7,910.3
-
-
7,910.3
7,148.1
-
-
7,148.1
Payments for claims
and other expenses
-
(6,890.5)
-
(6,890.5)
-
(6,563.0)
-
(6,563.0)
Total cash flows
7,910.3
(6,890.5)
-
1,019.8
7,148.1
(6,563.0)
-
585.1
Insurance contract liabilities
at 30 June
811.1
937.7
53.1
1,801.9
690.7
759.6
55.7
1,506.0
(i) Includes the movement between LFRC and LFIC in relation to the recognition and subsequent utilisation of the customer
give back provision of $(156.9) million (2023: $52.2 million), as well as movements in balances that do not form part of
insurance contract liabilities.
Of the LFIC balance, $989.6 million (2023: $811.1 million) has an expected maturity (based on the present value of future
cash flows) of one year or less and $1.2 million (2023: $4.2 million) has an expected maturity of 13 to 24 months.
Liability for incurred claims (LFIC) accounting policy
The LFIC provides for incurred claims and expenses that
have not yet been paid, including claims that have been
incurred but not yet reported. It is measured as the present
value of the estimated future payments arising from
claims incurred at the end of each reporting period under
insurance cover issued by the Medibank health insurance
fund and other incurred insurance service expenses.
The liability also allows for an estimate of claims handling
costs, which comprises all direct expenses of the claims
department and general administrative costs directly
attributable to the claims function. These include internal
and external costs incurred from the negotiation and
settlement of claims. The allowance for claims handling
costs at 30 June 2024 is 1.5% of the outstanding claims
liability (2023: 2.5%).
Annual Report 2024 87
Key estimate
The LFIC includes the expected claims payments and
expenses required to settle any insurance contract
obligations. The LFIC estimate with respect to claims
is based on an actuarial assessment of the hospital,
ancillary and overseas claim categories.
Hospital
and
overseas
Calculated using statistical methods
adopted for all service months but
with service levels for the most recent
service month (hospital) or two service
months (overseas) being based on
the latest forecast adjusted for any
observed changes in payment patterns.
Ancillary
Calculated using statistical methods
adopted for all service months.
The critical assumption is the extent to which claim
incidence and development patterns are consistent
with past experience. Adjustments are then applied to
reflect any unusual or abnormal events that may affect
the estimate of claims levels such as major variability to
claims processing volumes.
The process for establishing the LFIC involves consultation
with internal actuaries (including the Chief Actuary),
claims managers and other senior management. The
process includes monthly internal claims review meetings
attended by senior management.
Key estimate
The risk adjustment reflects the compensation required
for bearing uncertainty about the amount and timing of
cash flows that arises from non-financial risk. The risk
adjustment applied to the Group’s outstanding claims
central estimate (i.e. the claims reserve within the LFIC) at
30 June 2024 is 12.2% (2023: 12.2%). The risk adjustment
is based on an analysis of past experience, including
comparing the volatility of past payments to the adopted
outstanding claims estimate. The risk adjustment has been
estimated to equate to the Group’s objective of achieving
a probability of adequacy of at least 98% (2023: 98%).
Liability for remaining coverage (LFRC) accounting policy
The LFRC is measured as premiums received less amounts
recognised as insurance revenue for coverage that has
been provided. The LFRC is not adjusted for the effect of
financial risk and it is not adjusted to reflect the time value
of money, as the Group expects that the time of providing
the services is close to the related premium due date.
Insurance acquisition costs are expensed as incurred and
are included within profit or loss.
Onerous contracts accounting policy
Insurance contracts are onerous when the LFRC is
insufficient to pay future claims and other insurance
service expenses attributable to the contracts. The
Group’s contracts are assumed not to be onerous unless
facts and circumstances indicate otherwise. If there are
facts and circumstances that indicate contracts may be
onerous, a loss component is recognised in profit or loss if
the carrying amount of the LFRC is less than the estimated
fulfilment cash flows. No onerous contracts have been
identified in the current or prior reporting periods.
(c) Impact of changes in key variables on the LFIC
The key variables in the measurement of the LFIC include the
claims central estimate, risk margin and weighted average
term to settlement. A 10% increase/decrease in the claims
central estimate would result in a $30.1 million decrease/
increase to profit after tax and equity (2023: $31.1 million).
A 1% movement in other key variables, including risk margin
and weighted average term to settlement, would result in an
insignificant decrease/increase to profit after tax and equity.
(d) Insurance risk management
The Group provides private health insurance products including
hospital cover and ancillary cover, as stand-alone products
or packaged products that combine the two, for Australian
residents, overseas students studying in Australia and overseas
visitors to Australia. These services are categorised as two
types of contracts: hospital and/or ancillary cover.
The table below sets out the key variables upon which the
cash flows of the insurance contracts are dependent.
Type of
contract
Detail of contract workings
Nature of claims
Key variables that affect the timing
and uncertainty of future cash flows
Hospital
cover
Defined benefits paid for hospital
treatment, including accommodation,
medical and prostheses costs.
Hospital benefits defined by
the insurance contract or
relevant deed.
Claims incidence and claims inflation.
Ancillary
cover
Defined benefits paid for ancillary
treatment, such as dental, optical and
physiotherapy services.
Ancillary benefits defined by
the insurance contract or
relevant deed.
Claims incidence and claims inflation.
Insurance risks and the holding of capital in excess of prudential requirements are managed through the use of claims
management procedures, close monitoring of experience, the ability to vary premium rates, and risk equalisation.
88 Medibank
Notes to the consolidated financial statements
30 June 2024
Mechanisms to manage risk
Claims
management
Strict claims management ensures the timely and correct payment of claims in accordance with policy
conditions and provider contracts. Claims are monitored monthly to track the experience of the portfolios.
Experience
monitoring
Monthly financial and operational results, including portfolio profitability and prudential capital
requirements, are reported to management committees and the Board. Results are also monitored
against industry for insurance risks and experience trends as published by the regulator, APRA.
Prudential
capital
requirements
All private health insurers must comply with prudential capital requirements to maintain adequate
capital against the risks associated with its activities. The new Private Health Insurance Capital
Framework came into effect on 1 July 2023, and included a revised HPS 110 Capital Adequacy standard.
The new standard requires private health insurers to have a Board-approved Internal Capital
Adequacy Assessment Process (ICAAP). The ICAAP involves an integrated approach to risk and
capital management, based around assessing the level of, and appetite for, risk in the business and
ensuring that the level and quality of capital is appropriate for that risk profile.
Medibank’s ICAAP Summary Statement Policy (ICAAPSS policy) defines our approach to capital
management and sets out the target level of capital and the processes and framework to achieve
this outcome, including the triggers and actions to follow in the case of an adverse stress event.
Medibank’s capital management objective is to maintain a strong financial risk profile and capacity
to pay all eligible customer benefits, invest in the growth of our business to provide a return to
shareholders and to meet financial commitments.
Capital is managed against the ICAAPSS policy and performance is reported to the Board on a
monthly basis. The Board has a target level of capital which is in excess of the minimum regulatory
prescribed capital requirements.
The level of capital must also comply with the requirements in Medibank’s Liquidity Management
Policy, to ensure sufficient liquidity is available to fund all payments as and when they fall due.
In June 2023 APRA announced an additional capital adequacy requirement of $250 million for Medibank,
with effect from 1 July 2023, following a review of the 2022 cybercrime event. As a result, we have
temporarily increased Health Insurance business related capital to offset this supervisory adjustment.
Ability to vary
premium rates
The Group can vary future premium rates subject to the approval of the Minister for Health.
Risk equalisation
Private health insurance legislation requires resident private health insurance contracts to meet
community rating requirements. This prohibits discrimination between people on the basis of
their health status, gender, race, sexual orientation, religious belief, age (except as allowed under
Lifetime Health Cover provisions), increased need for treatment or claims history. To support these
restrictions, all private health insurers must participate in the Risk Equalisation Special Account.
Concentration
of health risk
The Group has health insurance contracts covering hospital and ancillary cover, and private
health insurance for overseas students and visitors to Australia. There is no significant exposure to
concentrations of risk because contracts cover a large volume of people across Australia.
COVID-19 reserve
The COVID-19 reserve was created on transition to AASB 17 Insurance Contracts. It represents the
expected future payments required due to the COVID-19 pandemic impacting availability and
accessibility to surgeries and other health services and therefore is deducted from capital.
The Group also created a sub-portfolio within the Health Fund Investment Portfolio with the express
purpose of funding claims deferred due to COVID-19 and customer give backs. The sub-portfolio
also supports the amount held for the APRA supervisory adjustment.
Annual Report 2024 89
Note 5: Shareholder returns
(a) Dividends
(i) Dividends paid or payable
Cents per fully
paid share
$m
Payment date
2024
2023 final fully franked dividend
8.30
228.6
5 October 2023
2024 interim fully franked dividend
7.20
198.3
20 March 2024
2023
2022 final fully franked dividend
7.30
201.0
29 September 2022
2023 interim fully franked dividend
6.30
173.5
22 March 2023
2024
$m
2023
(restated)
$m
Profit for the year - after tax, attributable to equity holders of the parent
492.5
308.6
Normalisation for growth asset returns
7.0
(4.7)
Normalisation for defensive asset returns – credit spread movement
(6.7)
(6.8)
Normalisation for movement in COVID-19 reserve
77.6
203.0
Underlying NPAT
570.4
500.1
Dividends Accounting Policy
A liability is recorded for any dividends determined on or before the reporting date, but that have not been distributed at
that date.
(ii) Dividends not recognised at the end of the
reporting period
On 22 August 2024, the directors determined a final fully
franked ordinary dividend for the six months ended 30 June
2024 of 9.40 cents per share. The dividend is expected to be
paid on 26 September 2024 and has not been provided for
as at 30 June 2024.
(iii) Franking account
Franking credits available at 30 June 2024 for subsequent
reporting periods based on a tax rate of 30% are
$483.7 million (2023: $533.6 million).
(iv) Calculation of dividend paid
Medibank’s target dividend payout ratio for the 2024 financial
year is 75-85% (2023: 75-85%) of full year normalised net profit
after tax (underlying NPAT). Normalised net profit after tax is
calculated based on statutory net profit after tax attributable
to equity holders of the parent entity, adjusted for short-term
outcomes that are expected to normalise over the medium
to longer term, most notably in relation to the level of gains or
losses from investments and movement in credit spreads, and
for one-off items, especially those that are non-cash, such
as impairments. Underlying NPAT is also adjusted for the
net movement in the COVID-19 reserve.
90 Medibank
Notes to the consolidated financial statements
30 June 2024
(b) Earnings per share (EPS)
2024
2023
(restated)
Basic and diluted earnings per share attributable to ordinary equity holders of the
parent entity (cents)
17.9
11.2
Profit for the year attributable to ordinary equity holders of the parent entity ($m)
492.5
308.6
Weighted average number of ordinary shares used in calculating basic and
diluted earnings per share
2,754,003,240
2,754,003,240
Basic EPS accounting policy
Basic EPS is calculated by dividing the profit attributable
to equity holders of Medibank by the weighted average
number of ordinary shares outstanding during the
reporting period.
Diluted EPS accounting policy
Diluted EPS is calculated as basic EPS with an adjustment
to the figures used in the determination of basic EPS to
take into account:
• The after income tax effect of any interest and other
financing costs associated with dilutive potential
ordinary shares.
• The weighted average number of additional ordinary
shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares.
Note 6: Investment portfolios
This note provides information on the net investment income
and the carrying amounts of the financial assets residing in
the two investment portfolios: the Health Fund Investment
Portfolio (including the sub-portfolio) and the Non-Health
Fund Investment Portfolio.
Health Fund Investment Portfolio
The Health Fund Investment Portfolio is managed in
accordance with the requirements of the Board approved
Capital Management Policy, APRA regulatory requirements
and the overall objective of achieving a capital base that is
both stable and liquid. Consequently, the asset allocation
of the Health Fund Investment Portfolio is skewed towards
defensive assets (less risky and generally lower returning)
rather than growth assets (riskier but potentially higher
returning). The Board approved short-term target asset
allocation for the Health Fund Investment Portfolio is
20%/80% for growth and defensive assets, and the long-
term Strategic Asset Allocation (SAA) is 25%/75% for growth
and defensive assets. The target asset allocation and SAA
have been revised to 18% growth and 82% defensive assets
from the 2025 financial year.
The Short-term Operational Cash (STOC) sub-portfolio
is in place to fund claims deferred due to COVID-19 and
customer give backs. It also includes $167.0 million (2023:
nil) to support the amount held for the APRA supervisory
adjustment. Given the sub-portfolio’s short-term nature,
it is managed separately from the target asset allocation
framework. This sub-portfolio is permitted to invest in bank
deposits, short-term domestic money market securities with
a minimum credit rating of A-1+ and Fixed Income assets with
a minimum credit rating of AA-.
Non-Health Fund Investment Portfolio
The Non-Health Fund Investment Portfolio is designed to
provide the Group with additional liquidity and financial
flexibility. The portfolio resides outside of the health fund and
is not subject to the same regulatory requirements as the
Health Fund Investment Portfolio. The CFO has delegation
from the Investment and Capital Committee to manage
the portfolio in accordance with the Board approved Non-
Health Fund Investment Management Policy and investment
strategy. The Non-Health Fund Investment Portfolio is
permitted to invest in bank deposits, short-term domestic
money market securities with a minimum credit rating of A-1+
and Fixed Income assets with a minimum credit rating of AA-.
Section 3: Investment portfolio and capital
Overview
This section provides insights into the Group’s exposure to market and financial risks and outlines how these risks are
managed. This section also describes how the Group’s capital is managed.
Annual Report 2024 91
Portfolio composition
2024
$m
2023
$m
2024
%
2023
%
Target
asset allocation
Growth
Australian equities
127.0
153.2
4.5%
5.7%
6.0%
International equities
109.9
121.3
3.9%
4.5%
5.0%
Property
151.9
174.4
5.4%
6.6%
7.0%
Infrastructure
98.3
94.7
3.5%
3.5%
2.0%
Total Growth1
487.1
543.6
17.3%
20.3%
20.0%
Defensive
Fixed income
1,670.7
1,542.1
59.5%
57.7%
60.0%
Cash2
651.6
587.1
23.2%
22.0%
20.0%
Total Defensive
2,322.3
2,129.2
82.7%
79.7%
80.0%
Total Health Insurance Fund
2,809.4
2,672.8
100.0%
100.0%
100.0%
Short-term operational cash portfolio (STOC)
642.9
393.8
Non-Health Fund Investment portfolio
234.5
211.2
Total investment portfolio
3,686.8
3,277.8
Operational cash
52.4
9.6
Total cash and cash equivalents and
financial assets at fair value
3,739.2
3,287.4
1. The average allocation to growth assets over the 12 months ending 30 June 2024 was 19.1% (2023: 20.6%).
2. For investment portfolio purposes, cash comprises cash and cash equivalents of $691.0 million (2023: $420.6 million), plus cash with longer maturities
of $484.2 million (2023: $342.0 million), less Non-Health Fund Investment portfolio cash of $12.9 million (2023: $1.5 million), less short-term operational cash
of $410.9 million (2023: $159.6 million), less cash allocated to the fixed income portfolio of $47.4 million (2023: $4.8 million).
Financial assets at fair value accounting policy
Investments in listed and unlisted equity securities held
by the Health Fund Investment Portfolio are accounted
for at fair value through profit or loss (FVTPL). Fixed
income investments held by the Health Fund Investment
Portfolio are also accounted for at FVTPL, as the Group
applies the fair value option to eliminate an accounting
mismatch. Transaction costs relating to these financial
assets are expensed in the consolidated statement of
comprehensive income. These assets are subsequently
carried at fair value, with gains and losses recognised
within net investment income in the consolidated
statement of comprehensive income.
Non-Health Fund Investment Portfolio
Fixed income assets held by the Non-Health Fund
Investment Portfolio are accounted for at fair value through
other comprehensive income (FVOCI) as the objective of
these assets is to collect contractual cash flows and to
sell the assets if required, and the contractual cash flows
are solely payments of principal and interest. These assets
are measured at fair value, with unrealised gains and
losses recognised within equity in other comprehensive
income. When the assets are derecognised, the cumulative
unrealised gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit
or loss. Interest income is recognised within net investment
income in the consolidated statement of comprehensive
income using the effective interest method.
For financial assets measured at FVOCI, the Group
applies the general impairment approach under AASB 9,
which requires the recognition of a loss allowance based
on either 12-month expected credit losses or lifetime
expected credit losses depending on whether there
has been a significant increase in credit risk since initial
recognition. Expected credit losses do not reduce the
carrying amount of the financial asset in the statement
of financial position, which remains at fair value. Instead,
a loss allowance is recognised in other comprehensive
income as the accumulated impairment amount.
Key judgement and estimate
Fair value measurement may be subjective, and
investments are categorised into a hierarchy depending
on the level of subjectivity involved in the valuation
techniques used to measure fair value. The hierarchy
is described in Note 6(b).
The fair value of level 2 financial instruments is
determined using a variety of valuation techniques,
which make assumptions based on market conditions
existing at the end of each reporting period. Valuation
methods include quoted market prices or dealer quotes
for similar instruments, yield curve calculations using the
mid yield, vendor or independent developed models.
The fair value of level 3 financial instruments is
determined using inputs that are not based on
observable market data.
92 Medibank
Notes to the consolidated financial statements
30 June 2024
(a) Net investment income
Net investment income is presented net of investment management fees in the consolidated statement of comprehensive
income.
2024
$m
2023
$m
Interest income1
131.4
86.0
Trust distributions
37.5
27.2
Net gain/(loss) on fair value movements on financial assets
8.1
34.8
Net gain/(loss) on disposal of financial assets
11.4
(4.4)
Investment management expenses
(4.6)
(5.0)
Interest expense
(1.6)
-
Net investment income
182.2
138.6
1. Includes interest income of $11.4 million (2023: $6.7 million) relating to financial assets at fair value through other comprehensive income (Non-Health
Fund Investments).
Net investment income accounting policy
Net investment income includes:
• Interest income on financial assets and interest expense
on borrowings, which is recognised using the effective
interest method.
• Trust distribution income derived from financial assets
at FVTPL, which is recognised when the Group’s right to
receive payments is established.
• Gains or losses arising from changes in the fair value of
financial assets measured at FVTPL.
• Investment management fees.
Annual Report 2024 93
30 June 2024
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Financial assets at fair value through profit or loss
Australian equities1
-
127.0
-
127.0
International equities1
-
109.9
-
109.9
Property1
-
-
151.9
151.9
Infrastructure1
-
-
98.3
98.3
Fixed income
65.1
2,274.4
-
2,339.5
Financial assets at fair value through other
comprehensive income - Fixed income
-
221.6
-
221.6
Balance at 30 June 2024
65.1
2,732.9
250.2
3,048.2
30 June 2023
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Financial assets at fair value through profit or loss
Australian equities1
-
153.2
-
153.2
International equities1
-
121.3
-
121.3
Property1
-
-
174.4
174.4
Infrastructure1
-
-
94.7
94.7
Fixed income
58.7
2,054.8
-
2,113.5
Financial assets at fair value through other
comprehensive income - Fixed income
-
209.7
-
209.7
Balance at 30 June 2023
58.7
2,539.0
269.1
2,866.8
1. Australian equities, international equities, property and infrastructure are indirectly held through unit trusts.
(b) Fair value hierarchy
The Group’s financial instruments are categorised according
to the following fair value measurement hierarchy:
• Level 1: Quoted prices (unadjusted current bid price) in
active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices).
• Level 3: Inputs for the asset or liability that are not based
on observable market data.
The following tables present the Group’s financial assets
measured and recognised at fair value on a recurring basis.
The Group’s other financial instruments, being trade and
other receivables and trade and other payables, are not
measured at fair value. The fair value of these instruments
has not been disclosed, as due to their short-term nature,
their carrying amounts are assumed to approximate their
fair values.
Transfers between fair value hierarchy levels are recognised
from the date of effect of the transfer. There were no transfers
between the fair value hierarchy levels during the year.
Fair value measurements using significant
unobservable market data (level 3)
The Group’s investments in infrastructure and property
financial assets are classified within level 3 of the fair value
hierarchy. These assets are held in unlisted unit trusts and
are valued at the redemption value per unit as reported by
the managers of such funds. They are classified within level
3 of the fair value hierarchy as their fair values are not based
on observable market data due to the infrequent trading of
these investments which results in limited price transparency.
The following table presents the changes in level 3 financial
assets during the period.
Infrastructure
$m
Property
$m
Total
$m
Balance at 1 July 2023
94.7
174.4 269.2
Disposals
-
(15.2)
(15.2)
Net unrealised gain/(loss)
on fair value movements
3.6
(7.3)
(3.7)
Balance at 30 June 2024
98.3
151.9 250.3
A 10% increase/decrease in the redemption price would
decrease/increase the fair value of the level 3 financial
assets by $25.0 million (2023: $26.9 million).
94 Medibank
Notes to the consolidated financial statements
30 June 2024
Note 7: Financial risk management
This note reflects risk management policies and procedures
associated with financial instruments. The Group’s
principal financial instruments comprise cash and cash
equivalents (short-term money market instruments), fixed
income assets (floating rate notes, asset-backed securities,
syndicated loans, fixed income absolute return funds and
hybrid investments), property assets, infrastructure assets,
Australian equities and international equities.
A strategic asset allocation is set and reviewed at least
annually by the Board and establishes the target and
maximum and minimum exposures in each investment
class. Transacting in individual investments is subject
to the delegation of authorities and approval process
that is established and reviewed by the Investment and
Capital Committee (ICC). Trading of derivative instruments
for purposes other than risk management cannot be
undertaken, unless explicitly approved by the ICC. The
Group was in compliance with this policy during the current
and prior reporting periods.
The main risks arising from the Group’s financial instruments
are market risk, credit risk and liquidity risk. Primary
responsibility for the consideration and control of financial
risks rests with the ICC under the authority of the Board. The
Board reviews and agrees policies for managing each of the
risks identified, including the setting of limits for trading in
derivatives, foreign currency contracts and other instruments.
Limits are also set for credit exposure and interest rate risk.
(a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices.
(i) Interest rate risk
Description
The risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
market interest rates.
Exposure
The Group has exposure to Australian variable and global fixed interest rate risk in respect of its cash and
cash equivalents (2024: $691.0 million, 2023: $420.6 million) and fixed income assets (2024: $2,561.1 million,
2023: $2,323.2 million). Both classes of financial assets have variable interest rates and are therefore
exposed to cash flow movements if these interest rates change. The Group regularly analyses its interest rate
exposure and resets interest rates on longer-term investments every 90 days on average. At balance date,
the Group’s fixed income assets had a modified duration of 0.2 years (2023: 0.5 years).
The Group also has exposure to variable interest rate risk in respect of its borrowings (2024: $34.9 million, 2023: nil).
Sensitivity
A 50bps increase/decrease in interest rates for the entire reporting period, with all other variables remaining
constant, would have resulted in a $8.2 million increase/decrease to profit after tax and equity (2023: $5.2
million). The sensitivity analysis has been conducted using assumptions from published economic data.
(ii) Foreign currency risk
Description
The risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange rates.
Exposure
All of the Group’s financial assets with a non-AUD currency exposure are fully economically hedged, except
for International equities which are unhedged.
At balance date, international equities financial assets (2024: $109.9 million, 2023: $121.3 million) had net
exposure to foreign currency movements.
Sensitivity
A 10% increase/decrease in foreign exchange rates, with all other variables remaining constant, would
have resulted in a $8.5 million decrease/increase to profit after tax and equity (2023: $9.4 million) in the AUD
valuation of international equities financial assets. Balance date risk exposures represent the risk exposure
inherent in the financial instruments.
Annual Report 2024 95
(iii) Price risk
Description
The risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices, whether those changes are caused by factors specific to the individual financial instrument
or its issuer, or factors affecting all similar financial instruments traded in the market.
Exposure
The Group is exposed to price risk in respect of its fixed income assets primarily due to movements in credit
spreads. This risk is managed through active management of credit exposures and credit spread duration.
The Group’s equity price risk arises from investments in property, infrastructure, Australian equities and
international equities. It is managed by setting and monitoring objectives and constraints on investments,
diversification plans and limits on investments in each country, sector and market.
Sensitivity
These investments are exposed to short-term fluctuations in price with their fair value movements being
recorded in the consolidated statement of comprehensive income. Price risk is managed by taking a
longer-term view of the investment portfolio.
The following sensitivity analysis is based on the equity price risk exposures on the average monthly
balances during the period and shows the impact on profit after tax and equity if market prices had
moved, with all other variables held constant.
2024
$m
2023
$m
+10.0%
-10.0%
+10.0%
-10.0%
Australian equities
9.0
(9.0)
10.3
(10.3)
International equities
7.4
(7.4)
7.7
(7.7)
Property
11.5
(11.5)
12.8
(12.8)
Infrastructure
6.8
(6.8)
5.2
(5.2)
In relation to fixed income assets, a 25bps increase/decrease in credit spreads, with all other variables
remaining constant, would have resulted in a $7.2 million decrease/increase to profit after tax and equity (2023:
$7.4 million). Balance date risk exposures represent the risk exposure inherent in the financial instruments.
(b) Credit risk
(i) Cash and cash equivalents and financial assets at fair value
Description
The risk of potential default of a counterparty, with a maximum exposure equal to the carrying amount
of these instruments.
Exposure
Credit risk exposure is measured by reference to exposures by ratings bands, country, industry and
instrument type.
The Investment Management Policy limits the majority of internally managed credit exposure to A-
or higher rated categories for long-term investments, and A2 or higher for short-term investments (as
measured by external rating agencies such as Standard & Poor’s). Departures from this policy and the
appointment of external managers require Board approval.
The Group does not have any financial instruments to mitigate credit risk and all investments are unsecured
(except for covered bonds, asset-backed securities and mortgage-backed securities). However, the impact
of counterparty default is managed through the use of Board approved limits by counterparty and rating
and diversification of counterparties.
Sensitivity
The Group’s cash and fixed income portfolios are subject to counterparty exposure limits. These limits
specify that no more than 50% (2023: 50%) of the cash portfolio can be invested in any one counterparty
bank and no more than 10% (2023: 10%) in any one counterparty corporate entity. In the Group’s fixed
income portfolio, the maximum amounts that can be invested in any one counterparty bank and any
one counterparty corporate entity are 50% (2023: 50%) and 15% (2023: 15%) of the portfolio respectively.
As at 30 June 2024 and 2023, the counterparty exposure of the Group was within these limits.
96 Medibank
Notes to the consolidated financial statements
30 June 2024
(ii) Trade and other receivables
Description
Due to the nature of the industry and value of individual policies, the Group does not request any collateral
nor is it the policy to secure its premiums in arrears and trade and other receivables. The Group regularly
monitors its premiums in arrears and trade and other receivables, with the result that exposure to bad debts
is not significant. The credit risk in respect to premiums in arrears, incurred on non-payment of premiums,
will only persist during the grace period of 63 days as specified in the Fund Rules, after which the policy may
be terminated. The Group is not exposed to claims whilst a membership is in arrears, although a customer
can settle their arrears up to the 63 day grace period and a claim for that arrears period will then be paid.
Trade and other receivables are monitored regularly and escalated when they fall outside of terms. The use
of debt collection agencies may be used to obtain settlement.
Exposure
There are no significant concentrations of credit risk on trade and other receivables within the Group.
Trade and other receivables accounting policy
Trade and other receivables are non-interest bearing
and generally due for settlement within 7 - 30 days.
These receivables are initially measured at fair value
and subsequently at amortised cost using the effective
interest method, less a loss allowance for expected credit
losses. The carrying value of trade and other receivables
is considered to approximate fair value, due to the
short-term nature of the receivables.
Collectability of trade receivables is reviewed on
an ongoing basis. The Group applies the simplified
impairment approach, where expected lifetime losses
are assessed based on historical bad and doubtful debt
roll rates and adjusted for forward looking information
where required. Any impairment loss on trade receivables
is recognised within other expenses in the consolidated
statement of comprehensive income.
(iii) Counterparty credit risk ratings
The following tables provide information regarding the Group’s credit risk exposure at balance date in respect of the major
classes of financial assets. Amounts are classified according to the short-term and equivalent long-term credit ratings
(as per published Standard & Poor’s correlations) of the counterparties. Assets that fall outside the range AAA to BBB are
classified as non-investment grade. The Group’s maximum exposure to credit risk at balance date in relation to each class
of recognised financial asset is the carrying amount of those assets in the consolidated statement of financial position.
Short-term rating
Long-term rating
2024
A-1+
AAA
$m
A-1+
AA
$m
A-1
A
$m
A-2
BBB
$m
B & below
BB & below
$m
Not rated
$m
Total
$m
Cash and cash equivalents
-
691.0
-
-
-
-
691.0
Financial assets at fair value
Australian equities
-
-
-
-
-
127.0
127.0
International equities
-
-
-
-
-
109.9
109.9
Property
-
-
-
-
-
151.9
151.9
Infrastructure
-
-
-
-
-
98.3
98.3
Fixed income
364.3
721.6
749.9
197.6
7.6
298.5
2,339.5
Financial assets at fair value through
other comprehensive income
-
221.6
-
-
-
-
221.6
Total
364.3
1,634.2
749.9
197.6
7.6
785.6
3,739.2
2023
Cash and cash equivalents
-
420.6
-
-
-
-
420.6
Financial assets at fair value
Australian equities
-
-
-
-
-
153.2
153.2
International equities
-
-
-
-
-
121.3
121.3
Property
-
-
-
-
-
174.4
174.4
Infrastructure
-
-
-
-
-
94.7
94.7
Fixed income
326.1
649.2
400.0
338.2
7.7
392.3
2,113.5
Financial assets at fair value through
other comprehensive income
-
209.7
-
-
-
-
209.7
Total
326.1
1,279.5
400.0
338.2
7.7
935.9
3,287.4
Annual Report 2024 97
The not rated fixed income assets relate to investments in
unrated unit trusts. The majority of the underlying securities
held by these unit trusts are investment grade assets and
Senior Loans.
(c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty
in raising funds to meet cash commitments associated
with financial instruments. It may result from either the
inability to sell financial assets quickly at their fair values;
or a counterparty failing on repayment of a contractual
obligation; or insurance liability falling due for payment
earlier than expected; or inability to generate cash inflows
as anticipated.
In order to maintain appropriate levels of liquidity, the
Health Fund Investment Portfolio’s target asset allocation
is to hold 20% (2023: 20%) of its total investment assets
in cash/bank deposits and highly liquid short-term
money market instruments and fixed income securities.
The Short-term Operational Cash (STOC) sub-portfolio
invests cash/bank deposits and highly liquid short-term
money market instruments and fixed income securities.
The Non-Health Fund Investment Portfolio provides the
Group with additional liquidity and financial flexibility
over and above the Fund’s target allocation.
Trade payables and other financial liabilities mainly
originate from the financing of assets used in ongoing
operations such as property, plant and equipment and
investments in working capital. These assets are considered
by the Group in the overall liquidity risk. To monitor existing
financial liabilities as well as to enable an effective overall
controlling of future risks, the Group has established
comprehensive risk reporting that reflects expectations of
management of expected settlement of financial liabilities.
The following table summarises the maturity profile of
the Group’s financial liabilities based on the remaining
undiscounted contractual cash flow obligations. Cash flows
for financial liabilities without fixed amount or timing are
based on the conditions existing at 30 June 2024.
Under 6
months
$m
6 to 12
months
$m
1 to 2
years
$m
Over 2
years
$m
Total
contractual
cash flows
$m
Carrying
amount
$m
2024
Trade and other payables1
138.8
6.6
11.7
6.7
163.8
163.8
Lease liabilities2
23.6
19.0
34.3
148.6
225.5
183.4
Borrowings
34.9
-
-
-
34.9
34.9
2023 (restated)
Trade and other payables1
97.2
2.6
5.9
9.1
114.8
114.8
Lease liabilities2
18.4
17.6
14.9
10.6
61.5
55.3
1. Contractual cash flows greater than 6 months primarily relate to the loyalty program.
2. Refer to Note 13 for further information on lease liabilities.
3. The Myhealth Medical Group has $34.9 million (2023: not applicable) of secured borrowings at variable interest rates. Refer to Note 16(b) for further
information on the acquisition of the Myhealth Medical Group.
Trade and other payables
accounting policy
Trade and other payables are
non-interest bearing and are
initially measured at fair value and
subsequently at amortised cost
using the effective interest method.
The carrying value of trade and
other payables is considered to
approximate fair value, due to the
short-term nature of the payables.
Loyalty program accounting policy
Where the amount of health
insurance revenue includes a loyalty
component, revenue is allocated to
this component based on the relative
estimated stand-alone selling price.
The component of loyalty revenue
is initially deferred as a liability
on the consolidated statement of
financial position, and subsequently
recognised in the consolidated
statement of comprehensive income
upon redemption when Medibank
is obliged to provide the specified
goods or services itself.
Borrowings accounting policy
Borrowings are held by the Myhealth
Medical Group and are initially
recognised at fair value, less directly
attributable transaction costs and
subsequently measured at amortised
cost using the effective interest
method. Gains and losses are
recognised in profit or loss when
the liabilities are derecognised.
98 Medibank
Notes to the consolidated financial statements
30 June 2024
Note 8: Equity
(a) Contributed equity
Contributed equity consists of 2,754,003,240 fully paid
ordinary shares at $0.03 per share. Ordinary shares entitle their
holder to one vote, either in person or by proxy on a poll, at a
general meeting of Medibank, and in a reduction of capital,
the right to repayment of the capital paid up on the shares.
Ordinary shares entitle their holders to receive dividends
and, in the event of winding up Medibank, entitle their
holders to participate in the distribution of the surplus assets
of Medibank.
(b) Reserves
Note
2024
$m
2023
(restated)
$m
Equity reserve1
17.8
17.8
Share-based payments
reserve2
6.5
10.1
COVID-19 reserve
(i)
128.0
205.6
Total
152.3
233.5
1. During the 2009 financial year, the parent entity entered into a
restructure of administrative arrangements, which gave rise to an
equity reserve representing the difference between the book value
of the net assets acquired from Medibank Health Solutions Pty Ltd
(formerly Health Services Australia Pty Ltd) and the total purchase
consideration.
2. The share-based payments reserve is used to record the cumulative
expense recognised in respect of performance rights issued to
participating employees. Refer to Note 18 for further information.
(i) COVID-19 reserve
The COVID-19 reserve was created on transition to AASB
17 Insurance Contracts and represents the expected
future payments required due to the COVID-19 pandemic
impacting availability and accessibility to surgeries
and other health services. Medibank has committed to
return permanent net claims savings due to COVID-19 to
policyholders. Accordingly, the balance of this reserve at
the reporting date represents the claims savings to date
that have not yet been utilised, net of tax.
The opening balance of the COVID-19 reserve at 1 July 2022
of $408.6 million arises from the derecognition of the $448.3
million deferred claims liability balance, which is unable
to be recognised under AASB 17. It also includes $135.5
million in relation to the cost of the previously announced
premium deferral give backs that are still to be expensed.
Derecognised deferred tax assets of $175.2 million in relation
to these items have also been recognised within the reserve.
Subsequently, the reserve is measured by comparing the
difference between the actual and expected volume of
insured surgical, non-surgical and ancillary procedures.
Where actual claims are below expected claims, the reserve
is increased by the amount of claims savings. Where actual
claims exceed expected claims, the reserve is decreased by
the amount utilised. In addition, the reserve is further utilised
for the cost of any premium deferrals or one-time cash give
backs that are returned to eligible policyholders.
The table below provides a reconciliation of the movement
in the COVID-19 reserve during the period.
2024
$m
2023
(restated)
$m
Balance at beginning of period
205.6
408.6
Lower/(higher) than expected claims
219.1
256.9
Premium deferral cost
(39.9)
(209.4)
Cash give back cost
(290.0)
(337.9)
COVID-19 impact
-
0.3
Tax effect of movements
33.2
87.1
Balance at end of period
128.0
205.6
Key estimate
The determination of the level of expected claims is a key estimate which is based on statistical analysis of the
estimated underlying claims growth per Single Equivalent Unit per policy (PSEU) that would have occurred if the
COVID-19 pandemic did not eventuate. It has then been applied to the average actual number of PSEUs.
Annual Report 2024 99
Section 4: Other assets and liabilities
Overview
This section provides insights into the operating assets used and liabilities incurred to generate the Group’s operating result.
Refer to Note 4 for further information on insurance contract liabilities.
Note 9: Property, plant and equipment
(a) Closing net carrying amount
Note
2024
$m
2023
$m
Plant and equipment
12.2
11.4
Leasehold improvements
72.7
10.5
Assets under construction
3.3
5.7
Right-of-use assets
13
116.8
42.9
Total property, plant and equipment
205.0
70.5
(b) Reconciliation of the net carrying amount
Plant and
equipment
$m
Leasehold
improvements
$m
Assets under
construction
$m
Total
$m
2024
Gross carrying amount
30.6
172.4
3.3
206.3
Accumulated depreciation and impairment
(18.4)
(99.7)
-
(118.1)
Net carrying amount
12.2
72.7
3.3
88.2
Net carrying amount at 1 July
11.4
10.5
5.7
27.6
Acquisition of business
2.6
13.1
-
15.7
Additions1
1.1
51.3
6.7
59.1
Transfers in/(out)
-
8.5
(9.1)
(0.6)
Depreciation expense
(2.9)
(10.7)
-
(13.6)
Net carrying amount at 30 June
12.2
72.7
3.3
88.2
2023
Gross carrying amount
26.9
99.5
5.7
132.1
Accumulated depreciation and impairment
(15.5)
(89.0)
-
(104.5)
Net carrying amount
11.4
10.5
5.7
27.6
Net carrying amount at 1 July
10.0
16.8
7.1
33.9
Additions
1.1
1.8
2.5
5.4
Transfers in/(out)
2.2
1.7
(3.9)
-
Depreciation expense
(1.9)
(9.8)
-
(11.7)
Net carrying amount at 30 June
11.4
10.5
5.7
27.6
1. Additions to leasehold improvements relate to the recognition of the new Melbourne corporate office lease. Refer to Note 13(a) for further information.
100 Medibank
Notes to the consolidated financial statements
30 June 2024
(c) Property, plant and equipment capital expenditure commitments
2024
$m
2023
$m
Capital expenditure contracted for at the end of the reporting period but not
recognised as liabilities
1.2
1.7
Property, Plant and Equipment Accounting Policy
Refer to Note 13 for the accounting policy for
right-of-use assets.
Property, plant and equipment is carried at cost less
accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to
the acquisition of the item and any subsequent expenditure
eligible for capitalisation. Repairs and maintenance costs are
recognised in the consolidated statement of comprehensive
income during the period in which they are incurred.
Depreciation
Property, plant and equipment is depreciated using the
straight-line method over the estimated useful life as follows:
Plant and equipment
2 - 15 years
Leasehold improvements
the lease term
Assets under construction
not depreciated until in use
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
Disposal
The gain or loss on disposal of property, plant and
equipment is calculated as the difference between the
carrying amount of the asset at the time of disposal and
the net proceeds on disposal (including incidental costs).
These gains or losses are included in the consolidated
statement of comprehensive income.
Note 10: Intangible assets
Note
Goodwill
$m
Customer contracts,
relationships
and brand
$m
Software
$m
Assets under
construction
$m
Total
$m
2024
Gross carrying amount
402.1
98.4
549.3
44.4 1,094.2
Accumulated depreciation and impairment
(78.4)
(89.7)
(459.1)
-
(627.2)
Net carrying amount
323.7
8.7
90.2
44.4
467.0
Net carrying amount at 1 July
204.5
0.3
89.6
33.7
328.1
Acquisition of business
16(b)
119.2
8.7
1.4
-
129.3
Additions
-
-
8.3
42.3
50.6
Transfers in/(out)
-
-
31.6
(31.6)
-
Amortisation expense
-
(0.3)
(40.7)
-
(41.0)
Net carrying amount at 30 June
323.7
8.7
90.2
44.4
467.0
2023
Gross carrying amount
282.9
89.7
508.0
33.7
914.3
Accumulated amortisation and impairment
(78.4)
(89.4)
(418.4)
-
(586.2)
Net carrying amount
204.5
0.3
89.6
33.7
328.1
Net carrying amount at 1 July
204.5
1.7
99.8
26.3
332.3
Additions
-
-
10.3
25.7
36.0
Transfers in/(out)
-
-
18.3
(18.3)
-
Amortisation expense
-
(1.4)
(38.8)
-
(40.2)
Net carrying amount at 30 June
204.5
0.3
89.6
33.7
328.1
Goodwill Accounting Policy
Goodwill is carried at cost less accumulated impairment
losses. Goodwill is not amortised and is tested for
impairment annually, or more frequently if events or changes
in circumstances indicate that it might be impaired.
Key estimate
Refer to Note 10(a) for further information on the
assumptions used in the recoverable amount
calculations.
Annual Report 2024 101
Software accounting policy
Software is carried at cost less accumulated amortisation
and impairment losses. Costs capitalised include external
direct costs of acquiring software, licences and service,
and payroll related costs of employees’ time spent on
the project. Assets are capitalised where there is control
of the underlying software asset and where they will
contribute to future financial benefits, through revenue
generation and/or cost reduction.
Amortisation is calculated on a straight-line basis over
the expected useful lives of the software (1.5 to 10 years).
Customer contracts, relationships and brand accounting policy
Customer contracts and relationships and brands
acquired as part of a business combination are carried
at their fair value at the date of acquisition less
accumulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis over
the expected useful lives (customer contracts and
relationships: 5 to 12 years, brand: 10 years).
Customer contracts and relationships are assessed
for indicators of impairment whenever events or changes
in circumstances indicate that the carrying amount may
not be recoverable.
(a) Impairment tests for goodwill – key assumptions and judgements
Below is a summary of the Group’s goodwill allocation to cash generating unit (CGU) and the key assumptions made
in determining the recoverable amounts.
2024
2023
Goodwill
allocation
$m
Growth
rate
%
Pre-tax
discount
rate %
Goodwill
allocation
$m
Growth
rate
%
Pre-tax
discount
rate %
Health Insurance
96.2
2.5
11.4
96.2
2.5
11.4
Medibank Health Telehealth
11.1
2.5
11.9
11.1
2.5
11.7
Medibank Health Home Care
97.2
2.5
11.9
97.2
2.5
11.7
On 5 January 2024, MH Solutions Investments Pty Ltd increased its shareholding in the Myhealth Medical Group
(Myhealth) (refer to Note 16(b) for further details). The difference between the consideration paid and the identifiable
assets and liabilities of Myhealth of $119.2 million, has been recorded as goodwill. This goodwill represents an increased
focus on primary care and preventative care, and profitability of the acquired business. The goodwill is non-deductible
for tax purposes and is expected to be allocated to the Myhealth cash-generating unit upon the finalisation of the
acquisition accounting. No indicators or impairment exists for this goodwill.
Forecast future
cash flows
The recoverable amounts of the CGUs are based on value in use (VIU) calculations, which use a
three-year cash flow projection per the Group’s Board approved Corporate Plan. A terminal value
has been assumed in the VIU calculations.
Discount rates
Estimated future cash flows are discounted using post-tax discount rates which reflect risks specific
to each CGU. The equivalent pre-tax discount rates are disclosed above.
Growth rates
The growth rates do not exceed the long-term average growth rates for the businesses in which the
CGUs operate as per industry forecasts.
Other key
assumptions
The key assumptions underpinning the cash flows are specific to each CGU and the industry in which
it operates. The assumptions applied are based on management’s past experience and knowledge
in the market in which the CGU operates. They include the following:
• Health Insurance CGU: Key assumptions include policyholder growth and future health insurance
revenue rate rises, along with claims growth and claims inflation.
• Medibank Health Telehealth CGU: The forecast cash flows contain key assumptions around
customer contracts, including contract renewals, new wins and losses.
• Medibank Health Home Care group of CGUs: Comprises acquired and internally developed
in-home care businesses. Goodwill has been allocated to the Home Care CGUs as the Group
derives strategic and operational synergies, and the Group monitors business performance at the
combined Home Care level. The forecast cash flows contain key assumptions around volumes of
services performed across geographic areas, expected contract renewals and new wins and losses.
There are no reasonably possible changes in key assumptions that could have resulted in an impairment loss in the current
or prior reporting periods.
102 Medibank
Notes to the consolidated financial statements
30 June 2024
Goodwill impairment accounting policy
Goodwill is allocated to CGUs, or groups of CGUs, at
which the goodwill is monitored and where the synergies
of the business combination are expected.
An impairment loss is recognised if the CGU’s carrying
amount exceeds its recoverable amount.
The recoverable amount of a CGU is the higher of its
fair value less costs of disposal and VIU. In assessing
VIU, estimated future cash flows are discounted to their
present value using a discount rate that reflects current
market assessments of the time value of money and the
risks specific to the CGU.
(c) Intangible assets capital expenditure commitments
2024
$m
2023
$m
Capital expenditure contracted for at the end of the reporting period
but not recognised as liabilities
0.3
-
Note 11: Provisions
Note
2024
$m
2023
(restated)
$m
Current
Employee entitlements
85.1
65.3
Provisions
11(a)
32.9
28.7
Total current
118.0
94.0
Non-current
Employee entitlements
16.4
14.4
Provisions
11(a)
13.2
6.2
Total non-current
29.6
20.6
(a) Movements in provisions
Movements in provisions, other than employee entitlements, are as follows:
Commissions
$m
Make good
$m
Workers
compensation
$m
Corporate
loyalty benefits
$m
Other
$m
Total
$m
Balance at 1 July 2023
7.8
4.0
4.3
16.8
2.0
34.9
Acquisition of business1
-
8.0
-
-
-
8.0
Additional provision
8.1
0.5
2.1
2.0
14.9
27.6
Amounts utilised during the year
(7.4)
(0.7)
(0.9)
(3.7)
(11.7)
(24.4)
Balance at 30 June 2024
8.5
11.8
5.5
15.1
5.2
46.1
Balance comprised of:
Current
8.5
3.4
0.7
15.1
5.2
32.9
Non-current
-
8.4
4.8
-
-
13.2
1. Relates to the acquisition of the Myhealth Medical Group. Refer to Note 16(b) for further information.
(i) Commissions provision
This provision relates to estimated commissions payable
to third parties in relation to the acquisition of health
insurance contracts.
(ii) Make good provision
The Group recognises a provision for the estimated costs
that may be incurred in restoring leased premises to their
original condition at the end of their lease term. These
costs are included in the cost of the right-of-use assets.
Annual Report 2024 103
(iii) Workers compensation provision
The parent entity is self-insured for workers’ compensation
claims. Provisions are recognised based on claims reported
and an estimate of claims incurred but not reported. These
provisions are determined on a discounted basis, using
an actuarial valuation performed at each reporting date.
The parent entity has entered into $10.0 million (2023:
$10.0 million) of bank guarantees in relation to its self-insured
workers compensation obligations.
(iv) Corporate loyalty benefits provision
This provision relates to estimated incentives payable
to third parties in relation to the acquisition of corporate
health insurance contracts.
Provisions Accounting Policy
Provisions are recognised when:
• The Group has a present legal or constructive
obligation as a result of past events.
• It is probable that an outflow of resources will
be required to settle the obligation.
• The amount has been reliably estimated.
Provisions are measured at management’s best
estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
Employee entitlements accounting policy
This provision incorporates annual leave, long service
leave, bonus plans and termination payments.
Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits, are recognised in respect of employees’ services up
to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled.
Liabilities for bonuses are based on a formula that takes
into consideration the performance of the employee
against targeted and stretch objectives, the profit of
the Group and other financial and non-financial key
performance indicators. The Group recognises a provision
when it is contractually obliged or where there is a past
practice that has created a constructive obligation.
Other long-term employee benefit obligations
Liabilities for long service leave are measured at the
present value of expected future payments using the
projected unit credit method, taking into account
expected future wage and salary levels, experience of
employee departures and periods of service.
Expected future payments are discounted using high
quality corporate bond yields with terms that closely
match the estimated future cash outflows. The obligations
are presented as current liabilities in the consolidated
statement of financial position if the Group does not have
an unconditional right to defer settlement for at least 12
months after the reporting date, regardless of when the
actual settlement is expected to occur.
Termination benefits
Termination benefits are payable when employment is
terminated by the Group before the normal retirement
date, or when an employee accepts voluntary redundancy
in exchange for these benefits.
Note 12: Contingent liabilities
(a) Cybercrime event
The Group was subject to a cybercrime in October 2022
which resulted in a data breach. Specific contingent
liabilities in relation to the cybercrime that may impact
the Group as known at this reporting period are set out
below. The outcome and any potential financial impacts
of the matters below are currently unknown, and as such
no provision has been recognised for these matters. The
outcome of these matters could impact the financial results,
cashflows and financial position of the Group.
It is not currently practicable to estimate the potential
financial impact, if any, of these claims.
AIC civil penalty proceedings
On 5 June 2024, Medibank received notice of civil penalty
proceedings filed in the Federal Court of Australia by the
Australian Information Commissioner (AIC) in relation to
the cybercrime. The proceedings relate to the AIC’s own
investigation into the cybercrime and allege that Medibank
breached Australian Privacy Principle 11.1.
If Medibank is found to have breached Australian Privacy
Principle 11.1, the AIC alleges that the interference with
individuals’ privacy was either serious and/or repeated
within the meaning of section 13G(a) & (b) of the Privacy
Act 1988 (Cth), and the AIC seeks penalties of up to $2.2
million per contravention. The AIC alleges either one or two
contraventions, or separate contraventions in respect of each
individual whose personal information Medibank held during
the relevant period (alleged to be 9.7 million individuals).
Medibank is defending the civil penalty proceedings.
OAIC representative complaint
Maurice Blackburn, in collaboration with Bannister Law and
Centennial Lawyers, has lodged a representative complaint
with the OAIC alleging Medibank has breached its privacy
obligations and seeks compensation for loss and damage,
including but not limited to distress and injury to feelings
and humiliation. The representative complaint is under
investigation by the OAIC.
Medibank is defending the representative complaint.
104 Medibank
Notes to the consolidated financial statements
30 June 2024
Consumer class actions
Medibank received notice of two separate consumer class
actions filed in the Federal Court of Australia in relation
to the cybercrime. On 1 August 2023 these proceedings
were consolidated into a single consumer class action. The
consolidated consumer class action is being brought by Baker
& McKenzie on behalf of persons who were Medibank or
ahm health insurance customers between 21 December 2001
and 12 October 2022, and persons who provided personal
information to Medibank or ahm for the purpose of obtaining
a quote for insurance but did not become a customer.
The consolidated statement of claim includes allegations
of breach of contract, contraventions of the Australian
Consumer Law, and breach of equitable obligations of
confidence. The amount claimed is unspecified, however
remedies sought include damages, declarations for
contraventions of the Privacy Act, injunctive relief requiring
Medibank to take reasonable steps to destroy or deidentify
personal information which Medibank no longer needs to
retain, interest and costs.
Medibank is defending this consolidated consumer class
action proceeding.
Shareholder class actions
Medibank received notice of two separate shareholder
class actions filed in the Supreme Court of Victoria. On
6 September 2023 these proceedings were consolidated
into a single shareholder class action. The consolidated
shareholder class action is being brought jointly by Quinn
Emanuel and Phi Finney McDonald on behalf of persons
who acquired an interest in Medibank shares or entered into
equity swap confirmations of Medibank shares during the
period 1 July 2019 to 25 October 2022.
The consolidated statement of claim includes allegations
of misleading or deceptive conduct and that Medibank
breached its continuous disclosure obligations under
the Corporations Act 2001 and ASX Listing Rules by not
disclosing to the market information relating to alleged
deficiencies in its cyber security systems. The amount
claimed is unspecified, however remedies sought include
damages, interest and costs.
Medibank is defending this consolidated shareholder class
action proceeding.
(b) Other contingency matters (excluding
cybercrime event)
The Group has issued $23.2 million of bank guarantees to
third parties for various operational and legal purposes,
including $10.0 million (2023: $10.0 million) in relation to its
self-insured workers compensation obligations (refer to
Note 11(a)(iii)) and other guarantees relating to conditions
set out in property agreements. It is not expected that these
guarantees will be called upon.
In addition to the items noted above in relation to the
cybercrime event, the Group is exposed from time to time to
contingent liabilities which arise from the ordinary course of
business, including:
• Losses which might arise from claims and litigation.
• Investigations from internal reviews and by regulatory
bodies such as the ACCC, APRA, ATO, ASIC or other
regulatory bodies into past conduct on either industry-
wide or Group specific matters.
It is anticipated that the likelihood of any unprovided
liabilities arising from these other contingency matters is
not material or are not at a stage to support a reasonable
evaluation of the likely outcome.
Key judgement and estimate
Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-
occurrence of uncertain future events outside the Group’s control, or present obligations that are not recognised
because it is not probable that a settlement will be required or the value of such a payment cannot be reliably estimated.
Judgement is exercised to identify whether a present obligation exists and also in estimating the probability, timing,
nature and quantum of the outflows that may arise from past events.
Annual Report 2024 105
Note 13: Leases
(a) Group as a lessee
The Group has lease agreements for corporate and
retail properties and medical clinics. Rental payments
are generally fixed, with differing clauses to adjust the
rental to reflect increases in market rates. These clauses
include fixed incremental increases, market reviews
and inflation escalation clauses during a lease on which
contingent rentals are determined. No operating leases
contain restrictions on financing or other leasing activities.
Management have determined it is not reasonably certain
that any of its leases will be extended or terminated.
As at 30 June 2024, the Group has recognised the lease
in relation to its new Melbourne corporate office. This has
resulted in the recognition of a right-of-use asset and lease
liability, and non-cash leasehold improvements additions
of $48.7 million (refer to Note 9).
The table below sets out the carrying amounts of the
right-of-use asset and the movements during the year.
2024
$m
2023
$m
Balance at 1 July
42.9
54.5
Acquisition of business1
68.7
-
Net additions
40.0
16.0
Depreciation expense
(34.8)
(27.6)
Balance at 30 June
116.8
42.9
1. Relates to the acquisition of the Myhealth Medical Group.
Refer to Note 16(b) for further information.
The table below sets out the carrying amounts of the
lease liabilities and the movements during the year.
2024
$m
2023
$m
Balance at 1 July
55.3
76.9
Acquisition of business1
85.6
-
Net additions
87.4
16.3
Accretion of interest
3.8
1.8
Lease payments
(48.7)
(39.7)
Balance at 30 June
183.4
55.3
Balance comprised of:
Current
31.7
30.9
Non-current
151.7
24.4
1. Relates to the acquisition of the Myhealth Medical Group.
Refer to Note 16(b) for further information.
The maturity profile of the Group's lease liabilities based on
contractual undiscounted payments is provided in Note 7(c).
Leases accounting policy
As a lessee
At inception of a contract, the Group assesses whether
a contract is, or contains, a lease by determining whether
it has the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to restore the underlying asset less any lease
incentives received.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
or the end of the lease term. In addition, the right-of-use
is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the Group’s
incremental borrowing rate. In determining the incremental
borrowing rate, the following components are considered:
• Reference rate (incorporating currency, environment, term).
• Financing spread adjustment (incorporating term,
indebtedness, entity, environment).
• Lease specific adjustment (incorporating asset type).
The interest expense recognised on the lease liability is
measured at amortised cost using the effective interest
method. The lease liability is remeasured when there is a
change in future lease payments, with a corresponding
adjustment made to the carrying amount of the right-of-
use asset (or profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero).
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases (leases with a
term of 12 months or less) and leases of low value assets.
The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over
the lease term.
106 Medibank
Notes to the consolidated financial statements
30 June 2024
(b) Group as a Lessor
Finance lease receivables of $4.1 million have been recognised by the Group at 30 June 2024 (2023: $0.6 million).
These are presented within other assets in the consolidated statement of financial position.
Leases accounting policy
As a lessor
The Group acts as an intermediate lessor for some
leases of medical clinics. The Group’s interest in the
head lease and sublease are accounted for separately.
At the sublease commencement, the Group determines
whether it is a finance or operating lease by assessing
whether the lease transfers substantially all of the risks
and rewards of ownership to the lessee, with reference
to the right-of-use asset arising from the head lease,
not with reference to the underlying asset.
Note 14: Reconciliation of profit after income tax to net cash flow from operating activities
Note
2024
$m
2023
(restated)
$m
Profit for the year
496.4
308.6
Non-cash items
Depreciation and amortisation
89.4
79.5
Non-cash share-based payments expense
3.3
6.7
Share of (profit)/loss from equity accounted investments
16(b)
7.1
1.4
Other non-cash items
1.8
1.8
Investing and financing items
Net realised loss/(gain) on financial assets
(11.4)
4.4
Net unrealised loss/(gain) on financial assets
(8.1)
(34.8)
Interest income
(129.8)
(86.0)
Trust distributions
(37.5)
(27.2)
Investment management expenses
4.6
5.0
Interest paid - leases
13
3.8
1.8
(Increase)/decrease in operating assets
Trade and other receivables
9.9
(5.5)
Other assets
2.7
(4.1)
Income tax receivable/liability
146.3
(214.8)
Net deferred tax assets
(63.3)
26.5
Increase/(decrease) in operating liabilities
Trade and other payables
35.7
13.2
Insurance contract liabilities
295.9
113.0
Provisions and employee entitlements
21.7
(5.0)
Net cash inflow from operating activities
868.5
184.5
Cash and cash equivalents accounting policy
Cash and cash equivalents comprise short-term highly
liquid investments that are readily convertible to known
amounts of cash and are subject to an insignificant
change in value. These investments have original
maturities of three months or less and include cash on
hand, short-term bank bills, term deposits and negotiable
certificates of deposit.
Amounts in cash and cash equivalents are the same as
those included in the consolidated statement of cash flows.
Annual Report 2024 107
Section 5: Other
Overview
This section includes additional information that must be disclosed to comply with Australian Accounting Standards,
the Corporations Act 2001 and the Corporations Regulations.
Note 15: Income tax
Tax consolidation legislation
Medibank and its wholly owned Australian controlled
entities are members of a tax consolidated group.
As a consequence, these entities are taxed as a single
entity and the deferred tax assets and liabilities of these
entities are offset in the consolidated financial statements.
The entities in the tax consolidated group entered into
a tax sharing agreement which limits the joint and
several liability of the wholly owned entities in the case
of a default by the head entity, Medibank.
The entities have also entered into a tax funding
agreement under which the wholly owned entities
fully compensate Medibank for any current tax payable
and are compensated by Medibank for any current
tax receivable.
Myhealth Medical Holdings Pty Ltd and its controlled
subsidiaries are not part of the Medibank tax
consolidated group.
(a) Income tax expense
2024
$m
2023
(restated)
$m
Current tax
277.0
98.6
Deferred tax
(62.0)
31.4
Adjustment for tax of prior period
0.3
(0.7)
Income tax expense
215.3
129.3
(b) Numerical reconciliation of income tax expense to prima facie tax payable
2024
$m
2023
(restated)
$m
Profit for the year before income tax expense
711.7
437.9
Tax at the Australian tax rate of 30%
213.5
131.4
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible expenses
0.2
0.8
Tax offset for franked dividends
(2.5)
(3.6)
Share of (profit)/loss from equity accounted investments
2.1
0.4
Other items
1.7
1.0
215.0
130.0
Adjustment for tax of prior period
0.3
(0.7)
Income tax expense
215.3
129.3
108 Medibank
Notes to the consolidated financial statements
30 June 2024
(c) Deferred tax assets and liabilities
Deferred tax balances comprise temporary differences attributable to following items.
2024
$m
2023
(restated)
$m
Recognised in the income statement
Trade and other receivables
1.4
1.1
Financial assets at fair value through profit or loss
(17.6)
(16.3)
Property, plant and equipment
(30.1)
(12.0)
Intangible assets
(2.8)
(6.3)
Trade and other payables
45.2
22.9
Employee entitlements
29.4
23.9
Insurance contract liabilities
91.4
35.3
Provisions
11.2
8.9
Business capital costs
0.6
0.2
Other (liabilities)/assets
13.0
4.3
141.7
62.0
Recognised directly in other comprehensive income
Actuarial loss on retirement benefit obligation
0.4
0.4
0.4
0.4
Net deferred tax assets
142.1
62.4
Income tax accounting policy
Current taxes
The current income tax expense is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period and includes any adjustment
to tax payable in respect of previous periods.
Deferred taxes
Deferred income tax is calculated using tax rates that
are expected to apply when the related asset is realised,
or the liability is settled. Deferred income tax is provided
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
consolidated financial statements, other than for the
following:
• Where they arise from the initial recognition of goodwill.
• Where they arise from the initial recognition of an
asset or liability in a transaction other than a business
combination that at the time of the transaction affects
neither accounting nor taxable profit or loss.
• For temporary differences between the carrying amount
and tax bases of investments in controlled entities where
the parent entity is able to control the timing of the
reversal of temporary differences and it is probable that
the differences will not reverse in the foreseeable future.
Current and deferred tax is recognised in the profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
Offsetting balances
Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and
settle the liability simultaneously. Deferred tax assets and
liabilities are offset when there is a legally enforceable right
to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority.
Annual Report 2024 109
Medibank Private Limited
Medibank Health
Solutions
Pty Ltd
Australian Health
Management Group
Pty Ltd
Medibank Private
Employee Share
Plan Trust1
MHSI
Pty Ltd
Medibank
Health Solutions
Telehealth
Pty Ltd
MH Investment
Holdings
Pty Ltd
MH Solutions
Investments
Pty Ltd
Live Better
Management
Pty Ltd
Integrated
Care Services
Pty Ltd
MH
Operations
Pty Ltd
Medi Financial
Services
Pty Ltd
HealthStrong
Pty Ltd
East Sydney
Day Hospital
Pty Ltd
(49%)
Adeney Private
Hospital Pty Ltd
(49%)
Integrated
Mental Health
Pty Ltd
(50%)
Medinet
Australia
Pty Ltd
(3.82%)
Amplar Home
Health
Pty Ltd2
Adeney Private
Hospital Pty Ltd
(49%)
Calvary Amplar
Health JV Pty Ltd
(50%) 3
SydOrtho
Holdings Pty Ltd
(50%)
Myhealth
Medical Holdings
Pty Ltd
(90.1%) 4
Note 16: Group structure
(a) Group structure
The summary Medibank Group structure is shown below. All entities, unless otherwise stated, are 100% controlled.
Controlled entities (subsidiaries)
The Group controls an entity when it is exposed, or has
rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through
its power over it. Non-controlling interests in the results
and equity of controlled entities are shown separately in
the consolidated statement of comprehensive income,
balance sheet and statement of changes in equity.
Acquisition accounting policy
The acquisition method is used to account for the
acquisition of subsidiaries. The consideration transferred
for the acquisition of a subsidiary comprises the fair
value of the assets transferred and the liabilities incurred.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values
at the acquisition date. The excess of the consideration
transferred and the amount of any non-controlling interest
in the acquiree over the fair value of the Group’s share
of the net identifiable assets acquired, is recorded as
goodwill. On acquisition, any non-controlling interests in
the acquiree are measured at either fair value or at the
non-controlling interest’s proportionate share of the net
identifiable assets acquired.
These subsidiaries are wholly owned by Medibank
Health Solutions Pty Ltd and have been granted
relief from the necessity to prepare financial
reports in accordance with the ASIC Corporations
(Wholly owned Companies) Instrument 2016/785.
These entities are equity accounted investments.
Refer to Note 16(b) for further information.
1. Refer to Note 18(a) for further information on the Employee Share Plan Trust.
2. Home Support Services Pty Ltd changed its name to Amplar Home Health Pty Ltd on 28 July 2023.
3. Calvary Medibank JV Pty Ltd changed its name to Calvary Amplar Health JV Pty Ltd on 26 October 2023.
4. On 5 January 2024, MH Solutions Investments Pty Ltd increased its shareholding in Myhealth Medical Holdings Pty Ltd
from 49.0% to 90.1%. Refer to Note 16(b) for further information.
110 Medibank
Notes to the consolidated financial statements
30 June 2024
(b) Equity accounted investments
As at 30 June 2024 the Group held the following investments in associates and joint ventures:
Ownership interest %
Name of company
Principal
activity
Place of
incorporation
Type
2024
2023
East Sydney Day Hospital Pty Ltd
Short stay hospital
Australia
Associate
49.00%
49.00%
Calvary Amplar Health JV Pty Ltd
Medical services
Australia
Joint Venture
50.00%
50.00%
Myhealth Medical Holdings Pty Ltd
Medical services
Australia
Associate
(i)
49.00%
Adeney Private Hospital Pty Ltd
Short stay hospital
Australia
Associate
49.00%
49.00%
Medinet Australia Pty Ltd
Digital health services Australia
Associate
3.82%
3.82%
SydOrtho Holdings Pty Ltd
Short stay hospital
Australia
Joint Venture
50.00%
50.00%
Integrated Mental Health Pty Ltd
Short stay hospital
Australia
Joint Venture
50.00%
50.00%
The following table shows the Group’s aggregated interests in equity accounted investments.
2024
$m
2023
$m
Balance at 1 July
117.6
103.7
Additions
15.5
17.8
Disposals
(67.3)
-
Dividends received
-
(2.5)
Share of net profit/(loss) for the year
(7.1)
(1.4)
Balance at 30 June
58.7
117.6
(i) Myhealth Medical Holdings Pty Ltd
On 5 January 2024, MH Solutions Investments Pty Ltd increased its shareholding in the Myhealth Medical Group
(Myhealth) from 49.0% to 90.1% for cash consideration of $50.8 million and contingent consideration of $1.0 million.
The transaction resulted in Medibank gaining control of Myhealth and accordingly has been accounted for as a
step-acquisition with a non-cash adjustment of $(2.9) million being recognised in the statement of comprehensive
income following the derecognition of the investment in association balance of $67.3 million.
The provisional fair values of net assets acquired include $119.2 million of goodwill, $8.7 million of brand intangible
assets, $1.3 million non-controlling interests and $12.9 million of other net liabilities.
(ii) Other
During the period, Medibank subscribed for additional shares in SydOrtho Holdings Pty Ltd for $8.3 million, Adeney
Private Hospital Pty Ltd for $2.8 million, East Sydney Day Hospital Pty Ltd for $1.0 million and Integrated Mental Health
Pty Ltd for $3.4 million.
Equity accounted investments accounting policy
The Group’s associates and joint ventures, which are
entities over which the Group has significant influence or
joint control, are accounted for using the equity method.
Under this method, the investment in associate or joint
venture is initially recognised at cost and is increased
or decreased to recognise the Group’s share of profit
or loss. Dividends received from an associate or joint
venture reduce the carrying amount of the investment.
Equity accounting of losses is restricted to the Group’s
interest in the associate or joint venture. The Group’s
share of profit or loss for the period is reflected in the
consolidated statement of comprehensive income.
Investments in associates and joint ventures are tested
for impairment if an event occurs that has an impact on
the estimated future cash flows from the net investment.
Equity accounting is discontinued from the date when the
investment ceases to be an associate or a joint venture.
Annual Report 2024 111
(c) Parent entity financial information
(i) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2024
$m
2023
(restated)
$m
Statement of financial position
Current assets
3,624.7
3,368.2
Total assets
4,317.4
3,942.8
Current liabilities
1,864.6
1,583.9
Total liabilities
2,136.9
1,817.3
Equity
Contributed equity
85.0
85.0
Reserves
Equity reserve
6.3
6.3
Share-based payment reserve
6.5
10.1
COVID-19 reserve
128.0
205.6
Retained earnings
1,954.7
1,818.5
Total equity
2,180.5
2,125.5
Profit for the year
485.5
299.0
Total comprehensive income
485.5
299.0
(ii) Guarantees entered into by parent entity
The parent entity has entered into $10.0 million (2023: $10.0 million) of bank guarantees in relation to its self-insured
workers compensation obligations and $1.0 million of bank guarantees relating to conditions set out in property
agreements. Refer to Note 11(a)(iii) for further information on the provision for workers compensation.
(iii) Contingent liabilities of the parent entity
Refer to Note 12 for details of the contingent liabilities of the parent entity.
(iv) Parent entity capital expenditure commitments
2024
$m
2023
$m
Capital expenditure contracted for at the end of the reporting period but not recognised as
liabilities
Property, plant and equipment
1.2
1.7
Intangible assets
0.3
-
Parent entity financial information accounting policy
The financial information for the parent entity, Medibank, has been prepared on the same basis as the consolidated
financial statements, except as set out below:
• Investments in subsidiaries are accounted for at cost less accumulated impairment losses.
• Assets or liabilities arising under tax funding arrangements with the tax consolidated entities are recognised as current
assets or current liabilities.
112 Medibank
Notes to the consolidated financial statements
30 June 2024
Note 17: Related party transactions
(a) Transactions with equity accounted investments
2024
$m
2023
$m
Transactions with equity accounted investments
Claims incurred
(5.3)
(3.8)
Services received
(1.1)
(0.6)
Services provided
3.5
6.6
Interest received
0.3
0.2
Outstanding balances with related parties
Amounts payable
(0.3)
(0.1)
Amounts receivable
1.1
0.5
Loan receivable
2.9
2.9
The related party transactions include amounts for the reimbursement of costs incurred as well as the payment of
policyholder claims and receipts in relation to services rendered, which are provided under normal commercial terms.
(b) Key management personnel remuneration
2024
$
2023
$
Short-term benefits
8,534,124
6,262,298
Post-employment benefits
238,661
240,338
Long-term benefits
308,294
276,922
Share-based payments
3,120,073
3,283,345
Total key management personnel
12,201,152
10,062,903
Refer to the remuneration report for further details of the composition of the key management personnel.
(c) Transactions with other related parties
Certain key management personnel hold director
positions in other entities, some of which transacted with
the Group during the current and prior reporting periods.
All transactions that occurred were in the normal course
of business on terms and conditions no more favourable
than those available on an arm’s length basis.
Note 18: Share-based payments
(a) Share-based payments arrangements
Performance rights to acquire shares in Medibank are granted
to members of the Executive Leadership Team (ELT), Senior
Executive Group (SEG) and other selected senior employees
as part of Medibank’s short-term incentive (STI) and long-term
incentive (LTI) plans. These plans are designed to:
• Align the interests of participating employees more
closely with the interests of customers and shareholders
by providing an opportunity for those employees to
receive an equity interest in Medibank.
• Assist in the motivation, retention and reward of
participating employees.
Performance rights granted do not carry any voting rights.
Medibank has an Employee Share Plan Trust to manage
its share-based payments arrangements. Shares allocated
by the trust to the employees are acquired on-market prior
to allocation. The Trust held nil shares at 30 June 2024.
(i) LTI offer
Under the LTI Plan, performance rights were granted
to selected employees as part of their remuneration.
Performance rights granted under the LTI Plan are
subject to the following performance hurdles:
• 30% of the performance rights (2023: 35%) will be
subject to a vesting condition based on Medibank’s
earnings per share compound annual growth rate
(EPS CAGR) over the performance period.
• 30% of the performance rights (2023: 35%) will be
subject to a relative total shareholder return (TSR)
vesting condition, measured over the performance
period against a comparator group of companies.
• 20% of the performance rights (2023: 30%) will be
subject to a performance hurdle based on the growth
of Medibank’s private health insurance market share
(as reported by APRA) over the performance period.
• 20% of the performance rights (2023: nil) will be subject
to a performance hurdle based on brand sentiment,
measured as the change in Medibank’s Customer
Net Promoter Score over the performance period.
Each performance hurdle under the LTI Plan has a
threshold level of performance which needs to be
achieved before vesting commences. Details of these
thresholds are outlined in the remuneration report.
The vesting conditions for performance rights in grants
will be tested over a three-year performance period
commencing on 1 July of the relevant period. Following
the three-year performance period, any performance
rights that meet the performance hurdles vest with deferral
conditions applying to specific employees as follows:
Annual Report 2024 113
• Up to 3 years for the CEO, with one third converting to
shares each year starting at the beginning of the year
following the end of the performance period.
• Up to 2 years for ELT members and other specified senior
executives, with half converting to shares at the beginning
of the year following the end of the performance period,
and the remaining amount converting to shares in the
following year.
Upon satisfaction of vesting conditions, and deferral
conditions, each performance right will convert into a fully
paid ordinary share on a one-for-one basis.
LTI performance rights do not attract a dividend during the
performance period, as they are still subject to performance
hurdles that will determine the number of rights that convert
to ordinary Medibank shares. Vested performance rights
subject to deferral conditions do not attract dividends
during the deferral period. On exercise of deferred vested
performance rights, additional Medibank shares are granted
to ensure each participant receives a benefit equivalent to
any dividends paid during the deferral period on the rights
being exercised.
The number of rights granted in the 2024 grants were
determined based on the monetary value of the LTI award,
divided by the volume-weighted average share price of
Medibank shares on the ASX during the 10 trading days up to
and including 30 June 2023. This average price was $3.56.
(ii) Annual STI offer
Under the Group’s STI Plan, 60% of STI awarded to ELT
members and other specified senior executives is paid
in cash after the announcement of financial results. The
remaining 40% is provided in the form of performance
rights granted under the Performance Rights Plan that
are subject to a 1 year service condition. Performance
rights are deferred for:
• Up to 5 years for the CEO with 20% of the deferred
amount released each year following the conclusion
of the service period.
• Up to 4 years for ELT members and other specified senior
executives, with 25% of the deferred amount released
each year following the conclusion of the service period.
Once deferral conditions are met, each performance
right will convert into a share on a one-for-one basis,
subject to any adjustment required to ensure that the
participant receives a benefit equivalent to any dividends
paid by Medibank during the deferral period on the rights
being exercised.
The number of rights to be granted will be determined based
on the monetary value of the STI award, divided by the
volume-weighted average share price over the 10 trading
days up to and including the payment date of cash STI.
Share-based Payment Accounting Policy
The fair value of the performance rights is recognised
as an employee benefits expense, with a corresponding
increase in equity. The total amount to be expensed
is determined by reference to the fair value of the
performance rights granted, which includes any market
performance conditions and the impact of any non-
vesting conditions, but excludes the impact of any service
and non-market performance vesting conditions. Non-
market vesting conditions are included in assumptions
about the number of performance rights that are
expected to vest.
The total expense is recognised over the period in which
the performance and/or service conditions are fulfilled
(the vesting period), ending on the date on which the
relevant employees become fully entitled to the award (the
vesting date).
At the end of each reporting period, the Group revises
its estimates of the number of awards that are expected
to vest based on the non-market vesting conditions.
The impact of the revision to original estimates, if any,
is recognised in profit or loss, with a corresponding
adjustment to equity.
(b) Performance rights – Group
Number of equity
instruments
2024
2023
Outstanding at 1 July
8,745,148
7,670,453
Granted1
3,341,835
4,118,306
Forfeited 2
(452,955)
(535,324)
Exercised1,3
(2,047,251)
(1,319,276)
Lapsed4
(765,002)
(1,189,011)
Outstanding at 30 June
8,821,775
8,745,148
Exercisable at 30 June
-
-
1. Instruments granted and exercised includes the additional Medibank shares received on the vesting of deferred STI performance rights as a benefit
equivalent to any dividends paid during the deferral period.
2. Forfeited relates to instruments that lapsed on cessation of employment.
3. Performance rights are exercised as soon as they vest.
4. Lapsed relates to instruments that lapsed on failure to meet the performance hurdles.
114 Medibank
Notes to the consolidated financial statements
30 June 2024
(c) Fair value of performance rights granted
Below is a summary of the fair values of the 2023 and 2024 LTI plans and the key assumptions used in determining
the valuation. The fair value was determined by an independent valuation expert and takes into account the terms
and conditions upon which they were granted.
TSR
performance rights
EPS and market share
performance rights
Brand sentiment
performance rights
2024
2023
2024
2023
20241
Grant date
11 December 2023
6 December 2022
11 December 2023
6 December 2022
11 December 2023
Date of commencement
of service and
performance period
1 July 2023
1 July 2022
1 July 2023
1 July 2022
1 July 2023
Expected vesting date
30 June 2026
30 June 2025
30 June 2026
30 June 2025
30 June 2026
Fair value
$1.78
$1.19
$3.16
$2.63
$3.16
Share price at grant date
$3.51
$2.93
$3.51
$2.93
$3.51
Dividend yield
(per annum effective)
4.1%
4.2%
4.1%
4.2%
4.1%
Franking rate
100.0%
100.0%
100.0%
100.0%
100.0%
Risk free discount rate
(per annum)
3.95%
3.06%
n/a
n/a
n/a
Volatility
18%
21%
n/a
n/a
n/a
1. New performance hurdle introduced in the 2024 LTI plan based on the change in Medibank’s Customer Net Promoter Score.
Note 19: Auditor's remuneration
During the year the following fees were paid or payable for services provided by the auditor of Medibank, its related
practices and non-related audit firms:
2024
$
2023
$
PricewaterhouseCoopers Australia (PwC):
Amounts received or due and receivable by the Company's auditor for:
– An audit or review of the financial report of the Company and any other entity within the Group
2,172,799
1,883,676
Other assurance services in relation to the Company and any other entity within the Group:
– Audit of regulatory compliance returns
556,468
325,200
– Accounting and other assurance services
242,775
180,208
Other services in relation to the Company and any other entity within the Group:
– Other non-audit services1
261,350
-
Total remuneration of PwC
3,233,392
2,389,084
1. Other non-audit services include regulatory reviews and consulting services.
Note 20: Other
(a) New and amended standards adopted
The Group applied AASB 17 Insurance Contracts for the first
time in this reporting period. The nature and effect of the
changes as a result of the adoption of AASB 17 are described
below. There have not been any further changes from what
was disclosed in the 31 December 2023 consolidated interim
financial report.
The other amendments and interpretations that became
effective for the annual reporting period commencing on
1 July 2023 did not have a material impact on the Group’s
accounting policies or on the consolidated financial report.
The Group has not adopted any standards, interpretations or
amendments that have been issued but are not yet effective.
AASB 17 Insurance Contracts
AASB 17 replaces AASB 4 Insurance Contracts, AASB 1023
General Insurance Contracts and AASB 1038 Life Insurance
Contracts. The Group has adopted AASB 17 using the full
retrospective approach, under which the reclassifications
and adjustments arising from the new standard have been
recognised in the opening consolidated statement of
financial position at 1 July 2022. Significant changes to key
estimates and judgements resulting from the application
of AASB 17 are set out below and in Note 4. Disclosure of
the new accounting policies is also included in the relevant
notes as appropriate.
Annual Report 2024 115
Recognition
The Group recognises groups of insurance contracts from
the earliest of, the beginning of the coverage period, the
date when the first payment from the policyholder is due
or received, or when the Group determines that a group
of contracts becomes onerous.
Level of aggregation
AASB 17 requires aggregation of insurance contracts
into portfolios of contracts that have “similar risks and
are managed together”. Portfolios are further divided
into groups of contracts for the identification of onerous
contracts. The Group provides only health insurance
contracts which are managed together and are subject
to similar health-related risks. Accordingly, one portfolio
of health insurance contracts has been identified that
is further disaggregated into profitable contracts and
onerous contracts (if applicable). These groups represent
the level of aggregation at which insurance contracts are
initially recognised and measured. These groups are not
subsequently reconsidered.
Measurement
The standard introduces a new general measurement
model (GMM) for accounting for insurance contracts.
However, a simplified premium allocation approach (PAA),
similar in nature to the previous measurement basis under
AASB 1023 General Insurance Contracts, is permitted if
the coverage period of the contracts is less than a year
or provided there is not a material difference between the
PAA and what would have been recognised under the GMM.
The majority of the Group’s contracts automatically qualify
for the simplified PAA as the coverage period of each
contract in the Group is one year or less. For those policies
with a coverage period of greater than a year the Group
has developed a model and methodology to assess their
eligibility to apply the PAA, which includes modelling the
outcome under a range of reasonably expected scenarios.
The testing concluded that the measurement of the liability
for remaining coverage (LFRC) determined under the PAA
would not differ materially from the one that would be
produced when applying the GMM. On this basis the Group
has applied the PAA model to all of its insurance contracts.
Acquisition costs
For groups of contracts that apply the PAA and have a
coverage period of one year or less, AASB 17 provides an
option to recognise any insurance acquisition costs as
expenses when incurred. The Group has elected to apply
this option and expense acquisition costs as incurred.
This is a change from the previous accounting treatment
under AASB 1023 whereby acquisition costs were amortised
over the average expected retention period.
COVID-19 accounting
The impact of COVID-19 on the Group saw the recognition
of a deferred claims liability and give back provisions in
prior periods, both of which have been impacted by the
adoption of AASB 17.
The deferred claims liability represented claims that have
been deferred as a result of COVID-19. Under AASB 17,
insurance liabilities are only able to include claims that have
occurred prior to the end of the reporting period. Therefore,
claims that are expected to arise in the future but have not
yet been incurred, such as the deferred claims liability, are
unable to be recognised under AASB 17. Whilst not related to
COVID-19, the provision for bonus entitlements is similar in that
it represents the expected future utilisation of unused benefit
entitlements and has also been derecognised under AASB 17.
The cost of the deferral of premium rate rise increases
(premium deferrals) provided to policyholders has previously
been recognised upfront as a provision for premium
deferral. AASB 17 requires that any reduced premium
received from policyholders is recognised on a passage of
time basis over the coverage period of the related insurance
contracts. Accordingly, the provision for premium deferral
has been derecognised on transition and any reduced
premiums received from customers, such as premium
deferrals, are recognised in the consolidated statement of
comprehensive income on a passage of time basis over the
policy coverage period.
To maintain transparency in relation to the Group’s
commitment to return any permanent net claims savings
due to COVID-19 to policyholders, a newly created COVID-19
equity reserve has been recognised on adoption of AASB 17
and the adjustments arising on the deferred claims liability
and premium deferral give backs have been recognised within
that reserve (net of tax). Refer to Note 8(b) for further details.
Onerous contracts
AASB 17 requires the identification of ‘groups’ of onerous
contracts. Contracts that are measured under the PAA are
assumed not to be onerous unless facts and circumstances
indicate otherwise.
The Group has developed a framework to identify
indicators of possible onerous contracts which includes
the consideration of information provided to senior
management to monitor financial performance. If facts
and circumstances are identified that indicate an onerous
contract may exist, then detailed testing using the GMM is
performed, and any onerous contract losses are required
to be recognised in the consolidated statement of
comprehensive income. There were no onerous contracts
identified on transition, the restated comparative periods,
or during the 12-month period to 30 June 2024.
Risk adjustment
AASB 17 requires a risk adjustment to be used in the
measurement of insurance contract liabilities. AASB 17 requires
an explicit risk adjustment for non-financial risk that represents
the Group's compensation required for bearing the uncertainty
about the amount and timing of the cash flows that arises
from the insurance contracts it issues. The Group uses a
confidence level technique to estimate the risk adjustment.
Financial impact on transition to AASB 17 at 1 July 2022
The Group’s net assets as at the transition date of 1 July 2022
were increased by $361.8 million.
116 Medibank
Notes to the consolidated financial statements
30 June 2024
This was comprised of the following adjustments:
1 July 2022
Net assets as
at 1 July 2022
$m
As previously reported
1,945.6
Derecognition of the deferred claims liability
448.3
Adjustment to the premium deferral provision
135.5
Derecognition of deferred acquisition costs
(82.9)
Derecognition of the provision for bonus
entitlements
16.0
Tax effects of the above adjustments
(155.1)
Restated
2,307.4
As noted above, the impacts for the deferred claims liability
and the premium deferral provision have been separately
recognised in a newly created COVID-19 equity reserve.
Refer to Note 8(b) for further details. All other opening
balance adjustments have been recognised within
retained earnings.
The standard also introduces changes to the presentation
and disclosure of insurance line items in the statement
of comprehensive income and balance sheet. These are
provided in the tables below (reclassification adjustments).
1 July 2022
Previously
reported
$m
Measurement
adjustments
$m
Reclassification
adjustments
$m
Restated
$m
Current assets
Cash and cash equivalents
596.7
-
-
596.7
Trade and other receivables
225.4
-
(190.4)
35.0
Financial assets at fair value
2,854.5
-
-
2,854.5
Deferred acquisition costs
35.4
(35.4)
-
-
Other assets
19.3
-
-
19.3
Total current assets
3,731.3
(35.4)
(190.4)
3,505.5
Non-current assets
Property, plant and equipment
88.4
-
-
88.4
Intangible assets
332.3
-
-
332.3
Deferred acquisition costs
47.5
(47.5)
-
-
Deferred tax assets
243.6
(155.1)
-
88.5
Equity accounted investments
103.7
-
-
103.7
Other assets
6.0
-
-
6.0
Total non-current assets
821.5
(202.6)
-
618.9
Total assets
4,552.8
(238.0)
(190.4)
4,124.4
Current liabilities
Trade and other payables
331.2
-
(238.7)
92.5
Lease liabilities
30.2
-
-
30.2
Claims liabilities
860.9
(457.6)
(403.3)
-
Insurance contract liabilities
-
-
1,312.2
1,312.2
Unearned premium liability
817.5
(145.2)
(672.3)
-
Tax liability
117.0
-
-
117.0
Customer give back provision
178.6
9.7
(188.3)
-
Provisions and employee entitlements
104.6
-
-
104.6
Total current liabilities
2,440.0
(593.1)
(190.4)
1,656.5
Non-current liabilities
Trade and other payables
9.9
-
-
9.9
Lease liabilities
46.7
-
-
46.7
Claims liabilities
10.2
(6.7)
(3.5)
-
Insurance contract liabilities
-
-
80.8
80.8
Unearned premium liability
77.3
-
(77.3)
-
Provisions and employee entitlements
23.1
-
-
23.1
Total non-current liabilities
167.2
(6.7)
-
160.5
Total liabilities
2,607.2
(599.8)
(190.4)
1,817.0
Net assets
1,945.6
361.8
-
2,307.4
The 30 June 2023 comparative financial information has also been restated for the impact of applying AASB 17.
The impact on profit for the period and net assets are set out in the following tables.
Annual Report 2024 117
Financial impact of adoption of AASB 17 at 30 June 2023:
30 June 2023
Previously
reported
$m
Measurement
adjustments
$m
Reclassification
adjustments
$m
Restated
$m
Current assets
Cash and cash equivalents
420.6
-
-
420.6
Trade and other receivables
248.1
-
(206.9)
41.2
Financial assets at fair value
2,866.8
-
-
2,866.8
Deferred acquisition costs
34.8
(34.8)
-
-
Tax receivable
97.8
-
-
97.8
Other assets
25.9
-
-
25.9
Total current assets
3,694.0
(34.8)
(206.9)
3,452.3
Non-current assets
Property, plant and equipment
70.5
-
-
70.5
Intangible assets
328.1
-
-
328.1
Deferred acquisition costs
44.3
(44.3)
-
-
Deferred tax assets
130.8
(68.4)
-
62.4
Equity accounted investments
117.6
-
-
117.6
Other assets
3.5
-
-
3.5
Total non-current assets
694.8
(112.7)
-
582.1
Total assets
4,388.8
(147.5)
(206.9)
4,034.4
Current liabilities
Trade and other payables
297.6
-
(197.8)
99.8
Lease liabilities
30.9
-
-
30.9
Claims liabilities
767.3
(261.1)
(506.2)
-
Insurance contract liabilities
-
-
1,370.1
1,370.1
Unearned premium liability
776.8
(39.9)
(736.9)
-
Tax liability
-
-
-
-
Customer give back provision
136.1
-
(136.1)
-
Provisions and employee entitlements
94.0
-
-
94.0
Total current liabilities
2,102.7
(301.0)
(206.9)
1,594.8
Non-current liabilities
Trade and other payables
15.0
-
-
15.0
Lease liabilities
24.4
-
-
24.4
Claims liabilities
10.0
(5.8)
(4.2)
-
Insurance contract liabilities
-
-
135.9
135.9
Unearned premium liability
131.7
-
(131.7)
-
Provisions and employee entitlements
20.6
-
-
20.6
Total non-current liabilities
201.7
(5.8)
-
195.9
Total liabilities
2,304.4
(306.8)
(206.9)
1,790.7
Net assets
2,084.4
159.3
-
2,243.7
Profit after tax for 12 months ended 30 June 2023
$m
Net assets as at 30 June 2023
$m
Balance at 1 July
511.1
2,084.4
Derecognition of the deferred claims liability
(194.5)
253.8
Adjustment to the premium deferral provision
(95.6)
39.9
Derecognition of deferred acquisition costs
3.8
(79.1)
Derecognition of the provision for bonus entitlements
(2.9)
13.1
Tax effects of the above adjustments
86.7
(68.4)
Restated
308.6
2,243.7
b) New accounting standards and interpretations
not yet adopted
There are no other standards, amendments or interpretations
that are not yet effective and that would be expected to
have a material impact on the Group in the current or future
reporting periods and on foreseeable future transactions.
(c) Events occurring after the reporting period
There have been no events occurring after the reporting
period which would have a material effect on the Group’s
financial statements at 30 June 2024.
118 Medibank
Basis of preparation
This consolidated entity disclosure statement (CEDS) has
been prepared in accordance with the Corporations Act
2001 (Cth) and includes each entity that was part of the
consolidated Medibank Group in accordance with AASB
10 Consolidated Financial Statements as at 30 June 2024.
All controlled entities are Australian residents and
Australian tax residents. Medibank Private Employee
Share Plan Trust is a trust, and all other controlled entities
are body corporate entities incorporated in Australia.
Consolidated entity disclosure statement
30 June 2024
% of share
capital 2024
Medibank Private Limited
N/A
Australian Health Management Group Pty Ltd
100.0%
Medibank Private Employee Share Plan Trust
N/A
Medibank Health Solutions Pty Ltd
100.0%
Medibank Health Solutions Telehealth Pty Ltd
100.0%
Live Better Management Pty Ltd
100.0%
Integrated Care Services Pty Ltd
100.0%
MHSI Pty Ltd
100.0%
MH Operations Pty Ltd
100.0%
Medi Financial Services Pty Ltd
100.0%
MH Investment Holdings Pty Ltd
100.0%
HealthStrong Pty Ltd
100.0%
Amplar Home Health Pty Ltd
100.0%
MH Solutions Investments Pty Ltd
100.0%
Myhealth Medical Holdings Pty Ltd1
90.1%
Myhealth Medical Group Pty Ltd1
90.1%
Myhealth Management Pty Ltd1
90.1%
Doctorbook Pty Ltd1
90.1%
Edensor Park Medical Centre Pty Ltd1
81.1%
Enfield MP Pty Ltd1
72.1%
Medical Academy Pty Ltd1
90.1%
Myhealth Airport West Pty Ltd1
54.1%
Myhealth Ashmore Pty Ltd1
54.1%
Myhealth Auburn Pty Ltd1
54.1%
Myhealth Barangaroo Pty Ltd1
90.1%
Myhealth Bayside Pty Ltd1
67.6%
Myhealth Benowa Pty Ltd1
72.1%
Myhealth Benowa Village Pty Ltd1
54.1%
Myhealth Blackburn Square Pty Ltd1
54.1%
Myhealth Blacktown West Point Pty Ltd1
54.1%
Myhealth Bondi Junction Pty Ltd1
90.1%
Myhealth Boronia Pty Ltd1
54.1%
Myhealth Box Hill Pty Ltd1
49.6%
Myhealth Brigadoon Pty Ltd1
54.1%
Myhealth Brisbane Showgrounds Pty Ltd1
54.1%
Myhealth Broadway Pty Ltd1
72.1%
Myhealth Browns Plains Pty Ltd1
54.1%
Myhealth Burleigh Waters Pty Ltd1
50.5%
Myhealth Burwood Pty Ltd1
54.1%
Myhealth Carlton Pty Ltd1
72.1%
Myhealth Castle Towers Pty Ltd1
54.1%
% of share
capital 2024
Myhealth Central Pty Ltd1
72.1%
Myhealth Chadstone Pty Ltd1
67.6%
Myhealth Chatswood Pty Ltd1
90.1%
Myhealth Chermside Pty Ltd1
85.6%
Myhealth Clyde North Pty Ltd1
81.1%
Myhealth Coolangatta Pty Ltd1
46.0%
Myhealth Coomera Pty Ltd1
90.1%
Myhealth Corio Pty Ltd1
54.1%
Myhealth Cranbourne Pty Ltd1
54.1%
Myhealth Cremorne Pty Ltd1
89.2%
Myhealth Dandenong Pty Ltd1
54.1%
Myhealth Darling Square Pty Ltd1
46.0%
Myhealth Diamond Creek Pty Ltd1
89.2%
Myhealth Doncaster East Pty Ltd1
63.1%
Myhealth Doncaster Pty Ltd1
72.1%
Myhealth East Yarrabilba Pty Ltd1
46.0%
Myhealth Eastland Pty Ltd1
54.1%
Myhealth Edens Landing Pty Ltd1
46.0%
Myhealth Edmondson Park Pty Ltd1
54.1%
Myhealth Engadine Pty Ltd1
90.1%
Myhealth Ermington Pty Ltd1
63.1%
Myhealth Fairfield Pty Ltd1
72.1%
Myhealth Forest Lake Pty Ltd1
54.1%
Myhealth Fortitude Valley Pty Ltd1
85.6%
Myhealth Fountain Gate Pty Ltd1
72.1%
Myhealth Foxwell Road Pty Ltd1
90.1%
Myhealth Garden City Pty Ltd1
54.1%
Myhealth Hamilton Pty Ltd1
81.1%
Myhealth Hampton Pty Ltd1
63.1%
Myhealth Helensvale Pty Ltd1
63.1%
Myhealth Highpoint Pty Ltd1
54.1%
Myhealth Holmview Pty Ltd1
64.0%
Myhealth Hurstville Pty Ltd1
54.1%
Myhealth IP Pty Ltd1
45.1%
Myhealth Ivanhoe Pty Ltd1
81.1%
Myhealth Kable Street Pty Ltd1
59.7%
Myhealth Kurrajong Village Pty Ltd1
46.0%
Myhealth Leichhardt Pty Ltd1
54.1%
Myhealth Lindfield Pty Ltd1
90.0%
Myhealth Liverpool Pty Ltd1
54.1%
Myhealth Logan Village Pty Ltd1
46.0%
Consolidated entity disclosure statement
Annual Report 2024 119
% of share
capital 2024
Myhealth Macarthur Square Pty Ltd1
54.1%
Myhealth Macquarie Park Pty Ltd1
72.1%
Myhealth Marketplace Pty Ltd1
64.0%
Myhealth Maudsland Pty Ltd1
72.1%
Myhealth M-City Monash Pty Ltd1
54.1%
Myhealth Meadowbank Pty Ltd1
67.6%
Myhealth Medical Baulkham Hills Pty Ltd1
46.4%
Myhealth Medical Merrylands Pty Ltd1
72.1%
Myhealth Medical Newington Pty Ltd1
46.0%
Myhealth Medical Top Ryde Pty Ltd1
63.1%
Myhealth Mentone Pty Ltd1
63.1%
Myhealth Miranda Pty Ltd1
72.1%
Myhealth Moreland Pty Ltd1
63.1%
Myhealth Nerang Pty Ltd1
90.1%
Myhealth Newtown Pty Ltd1
54.1%
Myhealth North Eltham Pty Ltd1
46.0%
Myhealth North Richmond Pty Ltd1
54.1%
Myhealth Northmead Pty Ltd1
54.1%
Myhealth Oran Park Pty Ltd1
63.1%
Myhealth Pacific Fair Pty Ltd1
54.1%
Myhealth Palm Beach Pty Ltd1
49.6%
Myhealth Parramatta Pty Ltd1
54.1%
Myhealth Penrith Pty Ltd1
54.1%
Myhealth Pimpama Pty Ltd1
89.2%
Myhealth Pittwater Place Pty Ltd1
54.1%
Myhealth Point Cook Pty Ltd1
54.1%
Myhealth Potts Point Pty Ltd1
54.1%
Myhealth Qld Bne Pty Ltd1
90.1%
Myhealth Qld GC Pty Ltd1
90.1%
Myhealth Redfern Pty Ltd1
54.1%
Myhealth Regents Park Pty Ltd1
54.1%
Myhealth Rhodes Pty Ltd1
54.1%
Myhealth Ringwood Pty Ltd1
54.1%
Myhealth Robina Pty Ltd1
67.6%
Myhealth Rockdale Pty Ltd1
63.1%
% of share
capital 2024
Myhealth Roselands Pty Ltd1
90.1%
Myhealth Ryde Pty Ltd1
63.1%
Myhealth SB Pty Ltd1
85.6%
Myhealth Services Pty Ltd1
90.1%
Myhealth Smith Collective Pty Ltd1
54.1%
Myhealth South Eveleigh Pty Ltd1
54.1%
Myhealth Southland Pty Ltd1
54.1%
Myhealth Springwood Pty Ltd1
81.1%
Myhealth St Helena Pty Ltd1
54.1%
Myhealth Sydney CBD Pty Ltd1
36.9%
Myhealth Sydney Harbour Pty Ltd1
75.7%
Myhealth Sydney North Pty Ltd1
90.1%
Myhealth Sydney SE Pty Ltd1
90.1%
Myhealth Sydney West Pty Ltd1
90.1%
Myhealth Tamborine Village Pty Ltd1
89.2%
Myhealth The Glen Pty Ltd1
72.1%
Myhealth Toorak Pty Ltd1
90.1%
Myhealth Toowong Pty Ltd1
85.6%
Myhealth Treetops Pty Ltd1
46.0%
Myhealth Vic New Pty Ltd1
90.1%
Myhealth Vic South Pty Ltd1
90.1%
Myhealth Warringah Mall Pty Ltd1
54.1%
Myhealth Wellington Point Family Practice Pty Ltd1
89.2%
Myhealth Wellington Point Pty Ltd1
54.1%
Myhealth Wentworth Point Pty Ltd1
54.1%
Myhealth Werrington County Pty Ltd1
46.0%
Myhealth West Moreton Pty Ltd1
54.1%
Myhealth Wetherill Park Pty Ltd1
54.1%
Myhealth Woodridge Pty Ltd1
64.0%
Myhealth Yarrabilba Pty Ltd1
79.3%
Myhealth Zetland Pty Ltd Ltd1
72.1%
Mymobile Health Pty Ltd1
81.1%
Newton Health Pty Ltd1
90.1%
The Medical Agency Pty Ltd1
90.1%
Wellington Point General Practice Pty Ltd1
54.1%
1. These entities are a part of the Myhealth Medical Holdings Group and have been consolidated with the Medibank Group from 5 January 2024.
120 Medibank
Directors' declaration
The directors declare that, in the opinion of the directors:
(a) the financial statements and notes set out on pages
76 to 119 are in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Company and the
Group’s financial position as at 30 June 2024 and of
its performance for the financial year ended on that
date; and
(ii) complying with Australian Accounting Standards,
the Corporations Regulations 2001 and other
mandatory professional reporting requirements;
(b) there are reasonable grounds to believe that the
Company will be able to pay its debts as and when
they become due and payable; and
(c) the consolidated entity disclosure statement on
pages 118 to 119 is true and correct.
Note 1(b) confirms that the financial statements also comply
with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
This declaration has been made after receiving the
declarations required to be made to the directors by the
Chief Executive Officer and Chief Financial Officer in
accordance with section 295A of the Corporations Act 2001
for the year ended 30 June 2024.
This declaration is made in accordance with a resolution
of the directors.
On behalf of the Board,
Mike Wilkins AO
David Koczkar
Chair
Chief Executive Officer
22 August 2024
Melbourne
Annual Report 2024 121
Auditor’s Independence Declaration
As lead auditor for the audit of Medibank Private Limited for the year ended 30 June 2024, I declare
that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Medibank Private Limited and the entities it controlled during the
period.
Marcus Laithwaite
Melbourne
Partner
PricewaterhouseCoopers
22 August 2024
Auditor's independence declaration
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
122 Medibank
Independent auditor’s report
Independent auditor’s report
To the members of Medibank Private Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Medibank Private Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial
performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
the consolidated statement of financial position as at 30 June 2024
•
the consolidated statement of comprehensive income for the year then ended
•
the consolidated statement of changes in equity for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the notes to the consolidated financial statements, including material accounting policy information
and other explanatory information
•
the consolidated entity disclosure statement as at 30 June 2024
•
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial report section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
Annual Report 2024 123
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or
in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on
the financial report as a whole, taking into account the geographic and management structure of the Group,
its accounting processes and controls and the industry in which it operates.
Audit scope
Key audit matters
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
Amongst other relevant topics, we communicated the
following key audit matters to the Audit Committee:
• Transition to AASB 17 Insurance Contracts
• Estimation of Liability for Incurred Claims
• Contingent liabilities
• Reliance on automated processes and controls
These are further described in the Key audit matters
section of our report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made
in that context.
Key audit matter
How our audit addressed the key audit matter
Transition to AASB 17 Insurance Contracts
(Refer to Note 20)
On 1 July 2023, the Group transitioned to reporting
under the new accounting standard AASB 17
Insurance Contracts (AASB 17) which replaced
AASB 1023 General Insurance Contracts.
The Group has evaluated the requirements of AASB
17 and exercised judgement to develop accounting
policies and determine appropriate methodologies to
comply with AASB 17.
In particular, the cashflows included within the
contract boundary of the insurance contracts, the
determination of risk adjustment and onerous
Our procedures included:
•
assessing the significant judgements used by
the Group to determine whether the relevant
accounting policies met the requirements of
AASB 17
•
evaluating the appropriateness of cashflows
included within the contract boundary of the
insurance contract
•
evaluating the Group’s premium allocation
approach eligibility analysis for insurance
contracts with coverage periods greater than
124 Medibank
Independent auditor’s report
Key audit matter
How our audit addressed the key audit matter
contract methodologies were deemed to be
significant judgemental areas to the overall impact of
transition. The new standard has also had a
significant impact on the disclosures in the financial
statements.
Due to the significance of the changes introduced by
the standard, we considered the transition to the new
standard to be a key audit matter.
one year, including testing the relevant
supporting data, the significant assumptions
used and scenarios applied, and testing the
accuracy of models used
•
evaluating the appropriateness of the
methodology used to determine the risk
adjustment, including assessing the model and
significant assumptions
•
evaluating the onerous contract methodology
used to identify any groups of onerous contracts
on transition
•
testing the material transition adjustments at 1
July 2022, as AASB 17 was applied
retrospectively.
We also assessed the reasonableness of the new
and restated disclosures in the financial report
against the requirements of AASB 17.
Estimation of Liability for Incurred Claims
$990.8m (2023: $815.3m)
(Refer to Note 4)
The Liability for Incurred Claims is recognised in the
Insurance Contract Liabilities financial statement line
item along with the Liability for Remaining Coverage.
The Liability for Incurred Claims relates to claims
received but not assessed and claims incurred but
not received by the Group at year end.
The Liability for Incurred Claims is estimated by the
Group using actuarial models and is calculated as a
central estimate, and a risk adjustment is applied by
the Group to reflect the uncertainty in the estimate.
The estimate and risk adjustment combined are
intended to achieve an actuarially defined probability
of adequacy (PoA) of 98% (2023: 98%).
The estimation of the Liability for Incurred Claims
involves complex and subjective judgements about
future events, both internal and external to the
business, including:
•
service levels for recent service months
Our procedures included:
•
evaluating the design of the Group’s key controls
relevant to the claims reserving process that
determines the Group’s central estimate
(including claims data reconciliations and the
Group’s review of the estimate)
•
assessing, on a sample basis, whether the key
controls relevant to our audit were operating
effectively throughout the year
•
together with PwC actuarial experts our
procedures included:
o
evaluating the work of management's expert,
being the Appointed Actuary, including his
professional competence, capability and
objectivity
o
considering whether the Group’s actuarial
methodologies were consistent with actuarial
practices and those used in the Private
Health Insurance industry
Annual Report 2024 125
Key audit matter
How our audit addressed the key audit matter
•
claims processing delays and pre-admission
hospital eligibility checks
•
historical patterns of claims incidence and
processing.
We considered this a key audit matter because of
the significant judgement and complexity required by
the Group in estimating claims liabilities, including
the extent to which claims incidence and
development patterns are consistent with past
experience, and because a small change in
assumptions can result in a material change in the
estimated liability and corresponding charge to profit
for the year.
o
assessing significant assumptions, and any
changes to these assumptions, adopted by
the Group in estimating the liability for
incurred claims with reference to external
and internal environmental factors
o
reperforming a selection of calculations over
the mathematical accuracy of the Group’s
actuarial models
o
evaluating the relevant underlying
calculations used to derive the risk
adjustment, including the significant
assumptions
•
for data used in the claims models, our
procedures included assessing, on a sample
basis, the relevance and reliability of significant
data inputs used in the Group’s modelling and
measurement of the central estimate.
We also assessed the reasonableness of the related
disclosures in the financial report against the
requirements of AASB 17.
Contingent liabilities
(Refer to Note 12)
Ongoing legal and regulatory matters, as a result of
the 2022 cybercrime event, may result in costs
associated with litigation, fines and penalties,
compensation, and/or other regulatory enforceable
actions. Such costs are uncertain and dependent on
the outcome of legal and regulatory processes which
remain ongoing.
We considered this a key audit matter because of
the significant judgement that is required by the
Group to determine the appropriate recognition,
measurement and disclosures of these matters.
Together with PwC legal experts, our procedures
included:
•
developing an understanding of the Group’s
processes and key controls for identifying and
assessing the impact of relevant legal and
regulatory matters
•
evaluating the nature and status of each of the
legal and regulatory matters, including the
current status of each claim, to determine
whether a provision and/or contingent liability is
required in accordance with Australian
Accounting Standards
•
assessing the reasonableness of relevant
disclosures in the financial report against the
requirements of the Australian Accounting
Standards.
126 Medibank
Key audit matter
How our audit addressed the key audit matter
Reliance on automated processes and controls
The Group utilises a number of complex and
interdependent Information Technology (IT) systems
to capture, process and report a high volume of
transactions.
We considered this a key audit matter because the:
•
operations and financial reporting processes
of the Group are heavily reliant on IT
systems
•
underlying IT controls over business
processes are significant to the financial
reporting process.
Together with PwC IT specialists, our procedures
included developing an understanding of the Group’s
IT governance framework, as well as performing
testing over the information technology controls
designed to mitigate the risk of material errors in the
Group’s financial report. This included testing of a
sample of controls in the following IT control areas:
•
program changes
•
access to programs and financial data
•
computer operations
•
key automated controls and reports.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2024, but does not include the financial report and
our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon through our opinion on the financial report. We have issued a
separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance with
Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of the financial report
that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Independent auditor’s report
Annual Report 2024 127
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June 2024.
In our opinion, the remuneration report of Medibank Private Limited for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing
Standards.
PricewaterhouseCoopers
Marcus Laithwaite
Melbourne
Partner
22 August 2024
128 Medibank
The shareholder information below is current as at 22 August 2024.
Distribution of equity securities
Size of shareholding
Number of
shareholders
Number of
shares
% of issued
shares
1 – 1,000
43,038
37,150,774
1.35
1,001 – 5,000
125,679
350,909,190
12.74
5,001 – 10,000
13,293
91,828,374
3.33
10,001 – 100,000
7,096
154,663,036
5.62
100,001 & over
186
2,119,451,866
76.96
Rounding
0.00
Total
189,292
2,754,003,240
100.00
Unmarketable parcels
There were 915 holdings of less than a marketable parcel ($500) of shares (131 shares based on a market price of $3.83 per share)
and such holders held a total of 25,108 shares.
20 largest shareholdings
Number of
shares
% of
issued capital
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
897,801,743
32.60
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
542,208,525
19.69
3
CITICORP NOMINEES PTY LIMITED
320,377,977
11.63
4
NATIONAL NOMINEES LIMITED
81,375,680
2.95
5
BNP PARIBAS NOMINEES PTY LTD
71,271,047
2.59
6
BNP PARIBAS NOMS PTY LTD
46,314,124
1.68
7
CITICORP NOMINEES PTY LIMITED
21,450,620
0.78
8
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20,002,248
0.73
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
8,980,884
0.33
10
BNP PARIBAS NOMINEES PTY LTD
7,590,106
0.28
11
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
7,343,069
0.27
12
NETWEALTH INVESTMENTS LIMITED
6,630,695
0.24
13
IOOF INVESTMENT SERVICES LIMITED
5,169,307
0.19
14
UBS NOMINEES PTY LTD
4,975,089
0.18
15
WARBONT NOMINEES PTY LTD
4,961,790
0.18
16
IOOF INVESTMENT SERVICES LIMITED
3,786,900
0.14
17
BOND STREET CUSTODIANS LIMITED
3,784,143
0.14
18
IOOF INVESTMENT SERVICES LIMITED
3,745,418
0.14
19
NETWEALTH INVESTMENTS LIMITED
3,279,571
0.12
20 SOLIUM NOMINEES (AUSTRALIA) PTY LTD
3,221,313
0.12
Total
2,064,270,249
74.96
Substantial shareholders
As at 22 August 2024 the following holders had provided a substantial shareholding notice:
Name of holder
Number of shares
% of issued capital
BlackRock Group
193,895,716
7.04%
State Street Corporation
172,722,617
6.27%
The Vanguard Group
137,868,557
5.006%
Shareholder information
Voting rights
At a general meeting of the Company, every shareholder
present (including virtually present) or by proxy, attorney or
representative has one vote on a show of hands and, on a
poll, one vote for each share held.
On-market purchases of shares
During the financial year ended 30 June 2024, 2,047,251
Medibank ordinary shares were purchased on market at
an average price of $3.50 for the purposes of Medibank’s
employee incentive schemes.
On-market share buy-back
There is no current on-market share buy-back.
Annual Report 2024 129
Financial calendar
Key dates
Full year results announcement
22 August 2024
Ex-dividend share trading commences
4 September 2024
Record date for final dividend
5 September 2024
Payment date for final dividend
26 September 2024
Annual general meeting
13 November 2024
Half year results announcement
February 2025
Payment date for interim dividend
March 2025
The above dates and payments are subject to confirmation.
Any change will be notified to the Australian Securities Exchange (ASX).
Corporate directory
Company
Medibank Private Limited
Registered Office
Level 2, 695 Collins Street,
Docklands Vic 3008
GPO Box 9999
Melbourne VIC 3001
Telephone:
132 331 (within Australia)
+61 3 8622 5780 (outside Australia)
medibank.com.au
Share registry
Computershare Investor Services
Pty Limited
GPO Box 2975
Melbourne VIC 3001
Telephone:
1800 998 778 (within Australia)
+61 3 9415 4011 (outside Australia)
computershare.com.au
Medibank Private Limited
ABN 47 080 890 259